Indian Contract Act 1872 Notes Sixth sem Bcom Business Regulations GFGC Gauribidanur
Essentials of a valid contract Meaning of contract In simple terms, a contract means when two parties put into writing an agreement which contains certain obligations (promises) which are to be performed by such parties, and when such written agreement becomes enforceable by law, it becomes a Contract. Enforceable by law means when the agreement has acquired the force of law only for those who are a party to it and a violation of those obligations would attract legal action, including repudiation of the entire contract. Contract Act defines a Contract as “An agreement which is enforceable by Law” [i] . An Agreement is a settlement between two parties, which contains obligations or promises which both parties need to fulfil. When such an agreement is made binding by Law it becomes a Contract. [ii] Therefore an agreement consists of reciprocal Promises which are to be performed by parties to the contract. Promises are reciprocal when both parties have to perform something for the o