history of Indian contract act , essential elements of a valid contract.

1. Indian contract act-1872
It was implemented 1st Sep. 1872 and divided
in different sections-
Section 1 to 75 for General Provision
Section76 to123 for Sales and Goods
Section 124 to 147 for Indemnity and
Guarantee
Section 148 to 181 for Bailment and Pledge
Section 182 to 238 for Agency
Section 239 to 266 for Partnership

2. Nature of contract-
We are well aware about the contract , in a day
we are doing so many contact example- a
man go the mechanic for repair his scooter,
when Ram buy a packet of cigarettes he is
making a contract of the sale of goods act
1930. when Ram goes to the cinema to watch
movie he is making another contract.

3. Section 2(h) of the Indian Contract Act, 1872[2] defines a
contract as “An agreement enforceable by law”. The
word ‘agreement’ has been defined in Section 2(e) of
the Act as ‘every promise and every set of promises,
forming consideration for each other’
Indian contract act based on English law, it extends to
entire India.
Anyone who conducts business uses contract law. Both
companies and consumers use contracts when they
buy and sell goods, when they license products or
activities, for employment agreements, for insurance
agreements and more. Contracts make these
transactions happen smoothly and without any
misunderstandings.

4. Essential elements of a valid contract u/s 10
1. Agreement- an agreement is the essence
of any contract. it is the result of offer and
acceptance between two or more parties.
the acceptance must be unconditional and
absolute. Agreement is called offer &
acceptance.
Example- A propose to sell his house to B for
Rs. 5 lakh and B gives his consent to
purchase the house for Rs. 5 lakh. This is
an agreement between A and B.

5. Feature of agreement-
a) Persons- Must be two or more person for
an agreement.
b) Understanding-Parties to an agreement
must agree about the subject matter of the
agreement in the same sense and at the
same time.

6. c) Legal obligation
An agreement must give rise to a legal obligation. If
an agreement is incapable of creating law. it is not
a contract. “all contract are agreement but all
agreement are not contract” agreement= offer+
acceptance.
Example- A agree to sell his car to B for Rs. 50,000.
the agreement gives rise to an obligation on the
part of A to deliver the car to B and on the part of
the B to pay Rs. 50,000 to A. this is a agreement of
a conract.

7. 2. Offer and Acceptance-
In offer and acceptance there must be two parties
one party making the offer and another parties
accepting. acceptance must be communicated to
the offerer.
3. Law full consideration-
An agreement to be enforceable by law must be
supported by consideration, moving from one
party to the other party. According to sec.25
agreement without consideration is void subject to
certain exception given in this section. The
agreement is legally enforceable by law when
parties give some thing and get something.

8. Example-Mr. X promise to sell his car to Mr. Y
for Rs. 50,000 in this agreement there is
consideration for both parties, for Mr. X it is
Rs. 50,000 and for Mr. it is car.
4. Capacity of parties- sec.11 and 12.
The parties to the agreement must be capable
for valid contract. If he has attained the age
of majority, is of sound mind and is not
disqualified from contracting by any other
law.

9. 5- Free and Genuine Consent sec. (13 & 14)-
It is essential to the creation of every contract there
must be free consent of the parties to the
agreement consent means that the parties must
have agreed upon the same things in the same
sense.
There is a absence of free consent-
1) Coercion u/s 15
2) Undue influence u/s 16
3) Fraud u/s 17
4) Misrepresentation u/s 18
5) Mistake u/s 19

10. Example- “X” at the gun point ask to “Y” to sell his
watch worth Rs. 9000 for Rs. 900 only. “Y”
accept the offer to sell his watch. Here “Y’s”
consent is not free. The agreement would be
voidable at option by “Y”.
6. Writing and registration-
According to Indian contract act , a contract may
be oral and writing. But in certain special cases
it must be in writing and registration.

11. Example- an agreement of sale of immovable
property must be in writing and registration
under the transfer of property act 1882.

12. 7- Lawful Object sec.(23)
The object of the agreement must be lawful.
The object must not be-
a) Illegal
b) Immoral
c) Oppose to public policy
Example- when a land lord knowingly lets a
house to a prostitute to carry on prostitution,
he can not recover the rent through a court
of law.

13. Example- Mr. X promises to give his car to “B”
for Rs. 50,000, if he beats Mr. Sudhir. Here the
object of contract is unlawful.
8. Certainty and Possibility of performance-
An agreement must be certain , it must be
possible to ascertain . An agreement must be
precise and certain.
Example- A agree to sell to B a hundred tons of
oil , there is nothing whatever to show what
kind of oil was intended. The agreement is
void for incertainty.