Question

Directions: Read the following passage and answer the questions given below:

A contract is an agreement enforceable at law, made between two or more persons, by which rights are acquired by one or more to acts or forbearances on the part of the other or others. A contract is an agreement creating and defining obligations between the parties. The Indian Contract Act, 1872 lays down general principles relating to formation and enforceability of contracts; rules governing the provisions of an agreement and offer; the various types of contracts including those of indemnity and guarantee, bailment and pledge and agency. It also contains provisions pertaining to breach of a contract. The Indian Contract Act has defined ”Contract” in Section 2(h) as ”an agreement enforceable by law”. This definition indicates that a contract essentially consists of two distinct parts. First, there must be an agreement. Secondly, such an agreement must be enforceable by law. An agreement gives birth to a contract. As per Section 2(e) of the Indian Contract Act, every promise and every set of promises, forming the consideration for each other, is an agreement. Agreements relating to social matters in which the idea of bargain is absentand there is no intention to create legal relations are not contracts. To form a valid contract there must be: an agreement based on the
genuine consent of the parties, supported by a lawful consideration made for a lawful object, and between the competent parties. One
of the early steps in the formation of a contract lies in arriving at an agreement between the contracting parties by means of an offer and acceptance. When one party (the offeror) makes a definite proposal to another party (the offeree) and the offeree accepts it in its entirety and without any qualification, there is a meeting of the minds of the parties and a contract comes into being, assuming that all other elements are also present.

What are the essentials of a valid contract?

• A. Offer, Acceptance, Consideration, Free Consent and Competency of Parties
• B. Offer, Acceptance, Social Obligation, Forced Consent and Competency of Parties
• C. Offer, Acceptance, Social Obligation, Free Consent and Incompetency of Parties
• D. Offer, Acceptance, Consideration, Forced Consent and Incompetency of Parties

Hint:

To form a valid contract, all the essential elements must be present, including a lawful object, mutual consent, and competence of the parties involved.

Answer 1

The Correct Option is A

The essentials of a valid contract include an offer, acceptance, consideration, free consent of the parties, and the competency of the parties to contract.

Answer 2

To form a valid contract under the Indian Contract Act, 1872, several essential elements must be present. These elements ensure that the agreement is legally binding and enforceable in a court of law.

1. Offer and Acceptance:
A valid contract begins with a clear and definite offer made by one party (the offeror) and its complete and unconditional acceptance by the other party (the offeree). This process establishes a mutual understanding or "meeting of the minds" between the parties.

2. Consideration:
As per Section 2(e) and 2(d) of the Indian Contract Act, there must be lawful consideration—something of value exchanged between the parties. It can be in the form of money, services, goods, or an agreement to do or refrain from doing something. Consideration is the foundation upon which the promise is made.

3. Free Consent:
The consent of the parties must be given freely and voluntarily. It should not be influenced by coercion, undue influence, fraud, misrepresentation, or mistake. If the consent is not free, the contract may be voidable at the option of the aggrieved party.

4. Competency of Parties:
The parties entering into the contract must be legally competent. According to Section 11 of the Indian Contract Act, a person is competent if they are of the age of majority, of sound mind, and not disqualified from contracting by any law.

5. Lawful Object:
The object of the contract must be legal. Contracts involving illegal or immoral acts are not enforceable and are considered void.

Conclusion:
The essentials of a valid contract are: Offer, Acceptance, Consideration, Free Consent, and Competency of Parties. If any of these elements is missing, the agreement may not be enforceable as a contract under Indian law.