In a valid contract, all the parties are legally sure to perform the contract. It means an agreement is considered a sway when it’s enforceable by law. it’s a contract, which may be enforced by either of the parties to the contract. If one among the parties refuses to perform the contract, the opposite party can take an action in a very court of law against such party. To be enforceable by law, an agreement must possess some essentials of a legitimate contract, which are stated in section 10 of the Indian Contract Act, 1872.
According to Section 10, “all agreements are contracts if they’re made by the free consent of parties, competent to contract, for a lawful consideration and with a lawful object and don’t seem to be hereby expressly declared to be void.” When necessary the agreement must satisfy the necessities of law regarding writing attestation or registration.
Essentials of Valid Contract
1. Offers and Acceptance
2. Legal Relationship
3. Lawful Consideration
4. Capacity of Parties
5. Free Consent
6. Lawful Objects
7. Writing and Registration
9. Possibility of Performance
10.Not Expressly Declared Void An agreement becomes enforceable by law when it fulfills essential conditions.
These conditions are also called the essentials of a legitimate contract, which are as follows:
1. Offers and Acceptance – For an agreement, there must be a lawful offer by one and lawful acceptance of that provided by the opposite party. The term lawful means the offer and acceptance must satisfy the wants of the Contract Act. The offer must be made with the intention of making legal relations otherwise, there’ll be no agreement.
2. Legal Relationship – Agreements of a social or domestic nature don’t create legal relations and intrinsically cannot create a contract. It’s presumed in commercial agreements that parties will create legal relations.
3. Lawful Consideration – The third essential of a sound contract is that the presence of consideration. Consideration is “something reciprocally.” It’s going to be some benefit to the party. Consideration has been defined because of the price paid by one party for the promise of the opposite. An agreement is enforceable only both parties get something and provides something. Something given or obtained is that the price of the promise and is termed consideration.
4. Capacity of Parties – An agreement is enforceable on the condition that it’s entered into by parties who possess the contractual capacity. It implies that the parities to an agreement must be competent to contract. in line with Section 11, so as to be competent to contract the parties must be of the age of majority and of sound mind and must not be disqualified from contracting by any law to which they’re subject. A contract by an individual of unsound mind is void ab-initio (from the beginning). If one amongst the parties to the agreement suffers from minority, madness, drunkenness, etc., the agreement isn’t enforceable at law, except in some cases. Example: M, someone of unsound mind, enters into an agreement with S to sell his house for Rs.2 lac. it’s not a sound contract because M isn’t competent to contract.
5. Free Consent – It is another essential of a sound contract. Consent means the parties must have prearranged the identical thing within the same sense. For a legitimate contract, it’s necessary that the consent of parties to the contract must be free.
6. Lawful Objects – It is also necessary that agreement should be made for a lawful object. The situation in which the agreement has been entered into must not be fraudulent, illegal, immoral, or opposition to public policy or must not imply injury to the person or property of another. Every agreement of which the thing or consideration is unlawful is prohibited is therefore void.
7. Writing and Registration – According to Contract Act, a contract is also oral or in writing. Although in practice, it’s always within the interest of the parties that the contract should be made in writing so it should be convenient to prove within the court. However, a verbal contract if proved within the court won’t be considered invalid merely on the bottom that it not in writing.
8. Certainity – According to Section 29 of the Contract Act, “Agreements the meaning of which don’t seem to be certain or capable of being made certain are void.” so as to grant rise to a legitimate contract the terms of the agreement, must not be vague or uncertain. For a legitimate contract, the terms and conditions of an agreement must be clear and certain.
9. Possibilty of Performance – The valid contract should be made capable of performance.
10. Not Expressly Declared Void – An agreement must not be one in all those, which are expressly declared to be void by the Act. Section 24-30 explains certain styles of agreement, which are expressly declared to be void. An agreement under control of trade and an agreement by way of wager are expressly declared void.