The Indian Contract act 1872 falls under the ambit of mercantile laws (Business
Laws). It came enforced on 1 September 1872. It is private law. Its basis is
English common law, but it was passed in the Indian Parliament, which is
It contains XI Chapters, but Chapter VII – Sale of Goods and Chapter XI –
Partnership was repealed, the Sale of goods was repealed in 1930, and the
partnership was in 1932. It became an independent act after repealing it from
its parent act, that is Indian Contract Act 1872. It becomes imperative to study
the Contract act, as today in the market sector all the dealings are made
It covers various aspects in a much broader sense such as it describes what is
an offer, acceptance, essentials of contract, valid consideration, voidable
agreements, quasi-contracts, damages under Indian contract act 1872. Apart from
it covers Contract of Indemnity, Guarantee, bailment, pledge and Agency.
What is a contract?
Under the Indian Contract Act 1872, the term contract is defined under Section
2(H), which states that an agreement that is enforceable by the law is known as
a Contract. In contract, there must be an intent to create legal relationships
not social, moral, or religious.
Essentials of a Valid Contract:
- Enforceable by law
What is an Agreement, well agreement is nothing but a set of promises, which
form the consideration for each other. It is defined under Section 2(e) of the
Indian Contract Act 1872. To simplify it,
Agreement = valid Offer/proposal + valid acceptance + lawful consideration
Section 2(a) defines offer, Section 2(b) defines acceptance, Section 2(d)
Now, what does the term enforceable signifies here, it means if there is any
breach of contract by any one party, then the aggrieved party can approach Court
and can get it legally enforced or we can say that court issues the direction to
the party who breached the contract to perform it or compensate the suffering
party in form of damages.
Consensus Ad Idem
One of the main elements of a contract is Consensus Ad Idem, which means meeting
Let us understand this with an illustration:
A and B are two parties, A owns 4 cars and wants to sell one of his cars, B
wants to purchase a black car. But at the time of sale B came to know that A is
selling his white car.
Hence there is no consensus Ad Idem
Essential of Consensus As idem
- Meeting of Minds
- On Same subject matter
- In same manner
Section 10 of ICA 1872
The elements which are necessary for a valid contract, described under Section
10 of ICA1872, which are as follows
- There must be a valid offer and acceptance
- There must be an intention to create a legal relationship.
- Lawful object and Consideration
- They must be competent to contract, means they must be major, not minor,
should be of sound mind.
- Free consent should be there
- More important should not be expressly declared as void.
Indian Contract Act 1872 covers all the aspects related to the contract in
depth. It discussed, in brief, the contract, what is a contract, and certain
other topics. One of the main essential is that there must be a legal
relationship to create contract, there is a famous case named Balfour v.
. It is very vital to study contract law, as all the dealings today made
are through contracts only, which outlines certain legal obligations on both the
parties to perform the contract.
Award Winning Article Is Written By: Mr.Deepak Kumar Chaurasia
Authentication No: AP33839614710-29-0421