Indian Contract Act: Essentials of a Valid Contract and Types of Contracts Questions

Question 1

Define contract.

Accepted Answer

A contract is an agreement enforceable by law.

Question 2

Define agreement.

Accepted Answer

An agreement is every promise and every set of promises forming consideration for each other.

Question 3

What is consideration?

Accepted Answer

Consideration is something in return for a promise (an act, abstinence or promise) at the desire of the promisor.

Question 4

Who is a competent person to contract?

Accepted Answer

A person who is of majority age, of sound mind and not disqualified by law is competent to contract.

Question 5

What is void agreement?

Accepted Answer

A void agreement is an agreement that is not enforceable by law.

Question 6

What is voidable contract?

Accepted Answer

A voidable contract is enforceable at the option of one party, usually the party whose consent was not free.

Question 7

Differentiate between agreement and contract (any three points).

Accepted Answer

Agreement vs contract (any three points):

| Basis | Agreement | Contract |
|---|---|---|
| Meaning | promise(s) between parties | agreement enforceable by law |
| Enforceability | may or may not be enforceable | enforceable by law |
| Scope | wider | narrower |

Question 8

Write any three essential elements of a valid contract.

Accepted Answer

Essential elements (any three):

1) Offer and acceptance.
2) Lawful consideration.
3) Capacity of parties.

(Also: free consent, lawful object, certainty, possibility, not expressly void.)

Question 9

Explain capacity of parties (any three points).

Accepted Answer

Capacity of parties:

1) Parties must be major (not minors).
2) Parties must be of sound mind at the time of contract.
3) Parties must not be disqualified by law (e.g., insolvent in some contexts).

Question 10

Explain free consent and mention any three factors that make consent not free.

Accepted Answer

Consent is free when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake.

Any three that make consent not free: coercion, undue influence, fraud.

Question 11

Differentiate between void agreement and void contract (any three points).

Accepted Answer

Void agreement vs void contract:

| Point | Void agreement | Void contract |
|---|---|---|
| Time | void from beginning | becomes void later |
| Enforceability | never enforceable | enforceable initially, later not |
| Example | agreement with uncertainty | contract becomes impossible later |

Question 12

Explain express, implied and quasi contracts (any three points).

Accepted Answer

1) Express contract: formed by words (written or spoken).
2) Implied contract: formed by conduct or circumstances.
3) Quasi contract: obligation imposed by law to prevent unjust enrichment, even without agreement.

Question 13

Explain the essential elements of a valid contract under the Indian Contract Act. Use a neat table and write in exam style.

Accepted Answer

A contract is an agreement enforceable by law. For a contract to be valid under the Indian Contract Act, certain essential elements must be present. If any essential element is missing, the agreement may become void, voidable or unenforceable.

**Essential elements of a valid contract:**

| Essential element | Meaning (exam-friendly) |
|---|---|
| Offer and acceptance | there must be a lawful proposal and lawful acceptance |
| Intention to create legal relations | parties must intend legal enforceability |
| Lawful consideration | something in return must exist |
| Capacity of parties | parties must be competent (major, sound mind) |
| Free consent | consent should not be caused by coercion, fraud, etc. |
| Lawful object | purpose must be legal and not against public policy |
| Certainty | terms must be clear and definite |
| Possibility of performance | agreement must be capable of performance |
| Not expressly declared void | should not fall under void agreements |
| Legal formalities (where required) | writing/registration/stamp if law requires |

Thus, a valid contract requires both mutual agreement and legal enforceability with all essential conditions satisfied.

Question 14

Distinguish between valid, void and voidable contracts with examples. Use a table.

Accepted Answer

Contracts can be classified based on validity. Understanding the difference between valid, void and voidable contracts is important for exam questions.

| Type | Meaning | Enforceability | Example |
|---|---|---|---|
| Valid contract | agreement enforceable by law | enforceable | sale contract with all essentials |
| Void agreement/contract | not enforceable by law | not enforceable | agreement with uncertain terms; agreement to do impossible act |
| Voidable contract | enforceable at option of one party | enforceable by aggrieved party | consent obtained by coercion or fraud |

A void agreement is void from the beginning. A void contract may become void later due to impossibility. A voidable contract remains valid until the aggrieved party rescinds it.

Therefore, the nature of enforceability is the key difference among these categories.

Question 15

Write a detailed note on types of contracts (classification) and explain any five with examples.

Accepted Answer

Contracts are classified in different ways for legal understanding. Common classifications include validity, formation and performance.

**Types of contracts (with examples):**

1) **Express contract:** terms are stated in words (written/spoken). Example: written employment agreement.
2) **Implied contract:** formed by conduct. Example: boarding a bus implies paying fare.
3) **Executed contract:** performance completed. Example: cash sale where goods and price are exchanged immediately.
4) **Executory contract:** performance is pending. Example: order placed today with delivery next week.
5) **Quasi contract:** obligation imposed by law to prevent unjust enrichment. Example: finder of goods must take reasonable care and return goods.

Other validity-based types include valid, void, voidable, illegal and unenforceable agreements.

Thus, classification helps in identifying rights, duties and remedies available to parties in different contractual situations.

Basis	Agreement	Contract
Meaning	promise(s) between parties	agreement enforceable by law
Enforceability	may or may not be enforceable	enforceable by law
Scope	wider	narrower

Indian Contract Act: Essentials of a Valid Contract and Types of Contracts

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