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Questions and Answers
What is the definition of a contract according to Section 2(h) of the Indian Contract Act, 1872?
An agreement enforceable by law
What are the essential elements of a contract?
Offer and Acceptance, Consideration, Capacity of parties, Free consent, Lawful object, and Not expressly declared void
What are the characteristics of an offer?
It must be clear, definite, and communicated to the offeree
What is the requirement for the acceptance of an offer?
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What is consideration in the context of a contract?
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Who are considered incompetent to contract?
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Study Notes
Contract Formation
Definition of Contract
- A contract is an agreement enforceable by law
- Section 2(h) of the Indian Contract Act, 1872 defines a contract as "an agreement enforceable by law"
Essential Elements of a Contract
- Offer and Acceptance
- Consideration
- Capacity of parties
- Free consent
- Lawful object
- Not expressly declared void
Offer
- A proposal made by one party to another
- Must be clear, definite, and communicated to the offeree
- Can be express or implied
Acceptance
- Unconditional assent to the terms of the offer
- Must be communicated to the offeror
- Can be express or implied
Consideration
- Something of value given in exchange for a promise
- Must be sufficient but need not be adequate
- Can be past, present, or future
Capacity of Parties
- Parties must be competent to contract
- Minors, lunatics, and persons disqualified by law are incompetent to contract
Free Consent
- Parties must give their consent freely
- Consent can be vitiated by coercion, undue influence, fraud, or misrepresentation
Lawful Object
- The object of the contract must be lawful
- Contracts with illegal or immoral objects are void
Contract Formation
Definition of Contract
- A contract is an agreement enforceable by law, as defined in Section 2(h) of the Indian Contract Act, 1872.
Essential Elements of a Contract
- A contract requires the presence of six essential elements: offer and acceptance, consideration, capacity of parties, free consent, lawful object, and not expressly declared void.
Offer
- An offer is a proposal made by one party to another, which must be clear, definite, and communicated to the offeree.
- An offer can be express or implied.
Acceptance
- Acceptance is an unconditional assent to the terms of the offer, which must be communicated to the offeror.
- Acceptance can be express or implied.
Consideration
- Consideration is something of value given in exchange for a promise, which must be sufficient but need not be adequate.
- Consideration can be past, present, or future.
Capacity of Parties
- Parties must be competent to contract, meaning they must have the legal capacity to enter into a contract.
- Minors, lunatics, and persons disqualified by law are incompetent to contract.
Free Consent
- Parties must give their consent freely, without any coercion, undue influence, fraud, or misrepresentation.
- If consent is vitiated by any of these factors, the contract may be void or voidable.
Lawful Object
- The object of the contract must be lawful, meaning it must not be illegal or immoral.
- Contracts with illegal or immoral objects are void.
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Description
Test your understanding of the definition and essential elements of a contract, including offer and acceptance, consideration, capacity, free consent, and lawful object.
