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Law is the body of principles recognized and applied by the state in the
administration of justice.
Purpose
All Contracts are Agreements whereas, all Agreements are not Contracts.
AGREEMENT &
ENFORCEABILITY BY LAW
Definition
A offer to sell his house to B for 80 lakhs. B accepts the offer, hence this
promise is an agreement.
Enforceable by Law
For e.g. “A” agrees to sell his car to “B” for 5 lakhs.
ESSENTIALS OF VALID
CONTRACT
The essentials of a valid contract are;
e.g. “A” offers his house to “B” for 50 lakhs and “B” accepts the offer.
“A” advertise in newspaper his house for sale, is not an offer.
Legal Obligations
e.g. “A” offers his house to “B” for 50 lakhs and “B” accepts the offer.
Here: Price is consideration for “A” and house for “B”.
“A” promises “B” to get him a job and B promises to pay bribe of 2 lakhs is a
contract or not?
Parties must be at age of majority, have sound mind and are not
disqualified from contracting by law.
Free Consent
e.g. “A” Compelling “B” to sell his house to him at gunpoint is not a valid
contract.
Lawful Object (Purpose/ Objective)
e.g. “A” promises orally to “B” to sell his book. (No need of Writing)
Father designed will to distribute the property in his sons. (need Writing)
Certainty Of Terms
e.g. “A” agrees to sell a car to “B” for 10 lakhs without stating its specifics is
void agreement.
“O” agrees to purchase a Van from “S”. The price was to be paid over the
duration of 2 years. Rate of interest and mode of payment was not certain, so it
is not a contract.
Possibility Of Performance
e.g. “C” agrees to “B” to put life into “B’s” dead brother.
Not Expressly Declared Void
e.g. “C” promises to close his business if “B” pays him 4 lakhs. It is a void
agreement as it is made in restraint of trade.
“C” promises to pay Rs 500 to “D” if Pakistan wins the final cricket match, is
wagering agreement and hence void.