1. Definition of a Contract and Its Main Characteristics
Definition:
A contract, as defined under Section 2(h) of the Indian Contract Act of 1872, is "an agreement enforceable by law." In essence, a contract is a legally binding agreement between two or more parties that creates obligations which are enforceable in a court of law.
Main Characteristics:
- Offer and Acceptance: A valid contract requires a lawful offer by one party and acceptance by another.
- Intention to Create Legal Relationship: The parties involved must intend for the agreement to have legal consequences.
- Lawful Consideration: There must be something of value exchanged between the parties.
- Capacity: The parties must have the legal capacity to enter in the contract.
- Free Consent: Consent must be given freely without coercion, undue influence, fraud, misrepresentation, or mistake.
- Lawful Object: The objective of the contract must be lawful and not against public policy.
- Certainty: The terms of the contract must be clear and unambiguous.
- Possibility of Performance: The terms must be capable of being performed.
IMP:- Is every agreement contract?
- No, every agreement is not a contract.
- An agreement to become a contract must give rise to a legal obligation (duty)
