Indian Contract Act Overview

A legally binding agreement between two or more parties, creating mutual obligations and enforceable rights.

They are the foundational elements that make a contract valid and enforceable. Without them, the contract may be considered void or unenforceable.

A clear expression of willingness to be bound by certain terms, communicated to the other party.

An unqualified and unconditional acceptance of all terms of the offer. It must be communicated to the offeror.

Something of value exchanged between the parties. It can be money, goods, services, or even a promise.

An agreement enforceable by law that arises when two or more parties, with a common intention, agree to create a legally binding relationship. It involves an exchange of promises or actions between parties with the intention of creating legal obligations.

For a contract to be valid, certain essential elements must be present:

1. Offer & Acceptance: A clear proposal and agreement to the terms.
2. Consideration: Something of value exchanged by both parties.
3. Capacity: Parties must be legally allowed to enter the contract (e.g., not minors).
4. Legality: The purpose and subject matter must be legal.
5. Free Consent: Agreement without coercion, fraud, or undue influence.
6. Certainty: Terms should be clear and definite.
7. Possibility of Performance: Agreed actions must be possible to perform.

Agreements can be classified based on their nature, formation, and performance. Here are some common types:

1. Express Contract: Explicitly stated in words, either written or orally.
2. Implied Contract: Arises from conduct or actions of the parties.
3. Bilateral Contract: Both parties make promises.
4. Unilateral Contract: Only one party makes a promise (e.g., reward offers).
5. Void Contract: Invalid from the beginning, with no legal effect.
6. Voidable Contract: Valid initially but can be terminated later.
7. Executed Contract: All obligations have been fulfilled.
8. Executory Contract: Some obligations remain to be performed.

A proposal or offer is a communication from one party (offeror) to another party (offeree), expressing willingness to enter into a contract on specific terms. It signifies the offeror's intention to be bound if the offeree accepts the offered terms.

Acceptance is the unqualified agreement to the terms of the offer, signifying the offeree's intention to be bound by the offer. It must be communicated to the offeror. If the acceptance deviates from the offer, it's considered a counter-offer, not an acceptance.