Law of Contract
What is Law of Contract?
An agreement made between two or more parties that is enforceable by law.
Key points
- To identify the essential elements of a valid contract.
- To distinguish between void, voidable, and valid contracts.
- To understand the concept of offer, acceptance, and consideration.
- To recognize situations where consent is not free.
Common exam trap
Confusing an agreement with a contract.
Definitions
- Term
Contract
- Meaning
An agreement made between two or more parties that is enforceable by law.
- Term
Agreement
- Meaning
Every promise and every set of promises, forming the consideration for each other, is an agreement.
- Term
Offer
- Meaning
A proposal made by one person to another for the purpose of obtaining the assent of that other to the proposed act.
- Term
Acceptance
- Meaning
The act of assenting to an offer.
- Term
Consideration
- Meaning
Something of value given by one party to another in exchange for a promise or performance.
- Term
Void Contract
- Meaning
A contract that is not enforceable by law from the beginning.
- Term
Voidable Contract
- Meaning
A contract that is valid and enforceable but can be repudiated or avoided by one of the parties.
Learning objectives
To identify the essential elements of a valid contract.
To distinguish between void, voidable, and valid contracts.
To understand the concept of offer, acceptance, and consideration.
To recognize situations where consent is not free.
To comprehend the consequences of a breach of contract.
Prerequisites
Basic understanding of legal terminology.
Familiarity with the concept of 'agreement' and 'promise'.
Common mistakes
Confusing an agreement with a contract.
Assuming all agreements are legally binding.
Overlooking the requirement of lawful consideration.
Not considering the capacity of parties to contract.
Ignoring the impact of 'free consent' and factors that vitiate it.
Keywords
Contract
Agreement
Offer
Acceptance
Consideration
Enforceability
Indian Contract Act
Void
Voidable
Breach
Remedy
Free Consent
Capacity
Practice preview
An agreement made without free consent is voidable. Which of the following vitiates free consent?…
easy
A contract is an agreement enforceable by law. Which of the following is an essential element for a valid contract?…
easy
A promises to pay B Rs. 500 if B finds A's lost dog. B finds the dog and hands it over to A. Is this a valid contract?…
medium