Definition of Contract

Section 2 (h) of the Indian Contract

Act provides that, An Agreement
enforceable by law is a contract
Therefore in a contract there must be
(1) an agreement and (2) the
agreement must be enforceable by
law
 Agreement

An agreement comes into existence whenever one

or more persons promise to one or others, to do
or not to do something, Every promise and every
set of promises, forming the consideration for
each other, is an agreement-Sec. 2(e). Some
agreements cannot be enforced through the
courts of law, e.g., an agreement to play cards or
go to a cinema. An agreement, which can be
enforced through the courts of law, is called a
contract.
 The Essential Elements of a
Contract

Offer and Acceptance

Intention to create Legal Relationship
Lawful Consideration
Capacity of Parties
Free Consent
Legality of the Object
Certainty
Possibility of Performance
Void Agreement & some example
Agreement in restraint to marriage. (se.
26)
Agreement in restraint of trade. (Sec.27)
Agreement in restraint of proceedings.
(sec. 28)
Agreements having uncertain meaning.
(Sec. 29)
Wagering agreement. (sec. 30)
Writing, Registration and Legal
formalities
An oral contract is a perfectly good
contract, except in those cases where
writing and/or registration is required by
some statute. In Bangladesh/India writing
is required in cases of lease, gift, sale and
mortgage of immovable property:
negotiable instruments; memorandum
and articles of association of a company
etc.
Writing, Registration and Legal
formalities
Registration is compulsory in cases of
documents coming within the preview of
Section 17 of the Registration Act, e.g.,
mortgage deeds covering immovable
property. The terms of an oral contract are
sometimes difficult to prove. Therefore
important agreements are usually entered
into in writing even in cases where
writhing is not compulsory.
 Conclusion

The elements mentioned above must all be

present. If any of them is absent, the
agreement does not become a contract. An
agreement which fulfils all the essential
elements is enforceable by law and is called
a contract. From this it follows that, every
contract is an agreement but all
agreements are not contracts.
 Conclusion

Every contract gives rise to certain

legal obligations or duties on the
part of the contracting parties. The
legal obligations are enforced by
the courts.
 Some definitions

Express Contract
Express Contract is one which is expressed in words
spoken or written. When such a contract is formed,
there is no difficulty in understanding the rights and
obligation of the parties.
Implied Contract
The conditions of an implied contract are to be
understood form the acts, the conduct of the parties
and/or the course of dealing between them.
 Some definitions
Quasi Contract
There are certain dealings which are not contracts strictly,
though the parties act as if there is a contract. The
Contract Act specifies the various situations which come
within what is called Quasi Contract
Executed Contract
There are contracts where the parties perform their
obligations immediately, i.e., as soon as the contract is
formed.
Executor Contract
In this contract the obligations of the parties are to be
performed at a later time.
 Some definitions

Bilateral Contracts
There must be at least two parties to the
contract. Therefore all contracts are bilateral
or multilateral.
Unilateral contract
In certain contracts one party has to fulfill his
obligations where as the other party has
already performed his obligations. Such a
contract is called unilateral contract.
 Some definitions

Legality or Validity of the Contract

Contracts can be classified into the
following: (1) valid, (2) void, (3)
voidable, (4) illegal and (5)
unenforceable.