Contract

Defination of contract:
Every agreement and promise enforceable at law is a contract.

Essentials of a valid of contract:

Contracts come in all shapes and sizes. Some are verbal, some are written. Some are formal, some informal. The use of the internet and electronic technology is also becoming increasingly common in the context of forming contractual relationships. It is, therefore, important to understand the essential features which make a contract valid, binding, and enforceable. The essentials of a valid contract are as fallows: 1. Offer and Acceptance When one person signifies to another his willingness to do or abstain from doing anything with a view to obtaining the assent of that other to such act or abstinence he is said to make a proposal. The first step towards creating a contract is that one person shall signify or make a proposal or offer to the other, with a view to obtaining the acceptance of that another person to whom the offer is made. A proposal when accepted becomes a promise.When the person to whom theprop osal is made signifies his assent thereof the proposal is said to be accepted. A proposal when accepted becomes a promise.

Example:
A offer to sell his bicycle to B for Rs 1000.This is an offer.If B accepts this offer,there is an acceptance. 2. Legal Obligation The parties to an agreement must create legal obligations.it means that if one party dose not fulfil his promise,he shall be liable for breach of contract.it is persumed in comercial agreements that parties intend to create legal relations.

Example:
A offer to sell his watch to B fpr Rs.500.B agree to buy.It is a contract as it creates legal obligation.

Bussiness law by Khalid Mehmood Cheema mrcurd.co.nz Islamic Law of Contracts and business Transactions By Tahir Mansoori

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3. Lawful Considration
When at the desire of the promisor the promisee or any other person has done or abstained from doing, or does or abstains from doing or promises to do or to abstain from doing something such act or abstinence or promise is called a consideration for the promise.

Example:
For example, if I promise to repair your car for free, there is no contract as I do get anything for promising to do the repairs. There is no consideration.

4. Capacity of Parties
Persons under the age of 18 years are liable only on contracts for "necessities". Necessities would include food, clothing, housing, medical attention etc. These days, it would also probably include a car for getting to and from work. With other types of contracts i.e. for non- necessities, a minor either will not be bound at all or he can repudiate the contract when he reaches the age of 18.

Example:
M a person of unsound mind agrees to sell his house to S for 3 Lac.It is a not a valid contract because M is not competent to contract.

5. Free consent
For a valid contract,it is essential that the consent of the parties must be free.

Example:
A compels B to enter into a contract at gunpoint.it is not avalid contract as the consent of b is nopt free.

6. Lawful object
Contracts to commit crimes or to engage in immoral acts are void. Contracts of gambling are void.

Example:
A, promises to pay B Rs.2000 if B beats c.The agreement is illegal as its object is unlawful.

Business Law by Khalid Mehmood Chema members.iinet.net Contract Act, 1872 www.oregon.gov

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7. Writing and registration

Oral contract is a valid contact. However the contract must be in writing and registered, if so required by any law, for example, gift, mortgage, sale, lease under the Transfer of Property Act 1882, Memorandum and Articles of Association of a Company under the Indian Companies Act, contracts under sub sections (10 and 3) of section 25 of the Indian Contract Act, etc. Documents specified under section 17 of the Indian Registration Act, 1908, are required to be registered.

8. Certainty
The terms of a contract should be clear. In other words, the contract must not be vague. Contracts which are vague cannot be enforced.

Example:
A promises to sell 20 books to B without specifying their titles.The agreement is void because the termsare not clear.

9. Possibility of Performance
Contracts based on impossibility of performance are not valid. The contracts must be capable of being performed.

Example:
A agree with B to discover a treasure by magic,the agreement is not inforceable.

10.Enforceable by Law
A contract in order to be valid must be enforceable by law which element distinguishes agreement and contract. It is enforceable by law it is contract otherwise it is an agreement. The aggrieved party should be able to obtain relief through law in the event of breach of contract. An agreement can also be inferred from correspondence exchanged between the parties.

Example:
A promises to close his business on the promise of B to pay him Rs.2 Lac is a void agreement because it is in restraint of trade.

Bussiness law by Khalid Mehmood Cheema mrcurd.co.nz Islamic Law of Contracts and business Transactions By Tahir Mansoori

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Agreement
Defination of Agreement:
Every promise and every set of promises,forming the concidration for each other,is an agreement.

Examples of Agreement:
Any changes to the plan require the agreement of everyone involved. There is wide agreement on this issue. They have been unable to reach agreement about how to achieve reform. I thought we had an agreement. Their agreement expires next year. He has to return the property under the terms of an agreement he has with the original owner. He signed an agreement to buy the property.

The purpose of an Agreement is to:

a) Provide a detailed outline of the responsibilities of the parties involved. These responsibilities are referred to as obligations. b) Grant permission to perform work on or across right-of-way belonging to others; provide for temporary or permanent street closures; obtain approval for any required changes of grade; etc. c) Transfer jurisdiction or abandon a section of roadway from one agency to another. d) Determine long-term responsibility for a facility such as maintenance of a traffic control signal or landscaping. e) Provide additional support to ODOT permits or other documents. f) Establish specific criteria for local land use and access management decisions affecting an ODOT transportation facility. g) Coordinate with local agencies and provide guidance on federally funded nonhighway projects.
h) Address funding and cost responsibilities for planning; project development; right-of-way acquisition; construction; maintenance; etc.

Business Law by Khalid Mehmood Chema members.iinet.net Contract Act, 1872 www.oregon.gov

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Aqd
Defination of Aqd:
In Islamic legal literature aqd is used in two senses i.e. general and specific. In general sense; aqd is apply to every act which is undertaken in ear nestness and with firm determination regardless whether it imerge from a unilateral intention such as wakf, remission of debts, divorce, undertaking an oath, or it results from mutual agreement, such as sale hire agency and mortgage.Aqd in this sense is applied to an obligation irrespective of the fact that the source of this obligation is a unilateral declartion or agreement of two declarations. In the specific sense it has been defined in different ways.however ,the common feature of all definations is that it is a combination of an offer and acceptance which gives rise to certain legal consequences.

Technical Defination of Aqd:

Contract is concurrence of two wills to create an obligation or to shift it or to relinquish it.

Bussiness law by Khalid Mehmood Cheema mrcurd.co.nz Islamic Law of Contracts and business Transactions By Tahir Mansoori

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