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Essential Elements of A Contract

This document defines the essential elements of a contract, including offer and acceptance, consideration, agreement, and legal enforceability. It states that an offer combined with acceptance creates a promise, and when consideration is added, there is an agreement. However, for an agreement to be considered a legally binding contract, it must also meet the criteria of legal enforceability, such as having lawful consideration and the capacity and consent of the parties. Examples are provided to illustrate these concepts and distinguish a contract from a void agreement.

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67 views9 pages

Essential Elements of A Contract

This document defines the essential elements of a contract, including offer and acceptance, consideration, agreement, and legal enforceability. It states that an offer combined with acceptance creates a promise, and when consideration is added, there is an agreement. However, for an agreement to be considered a legally binding contract, it must also meet the criteria of legal enforceability, such as having lawful consideration and the capacity and consent of the parties. Examples are provided to illustrate these concepts and distinguish a contract from a void agreement.

Uploaded by

Tasnim Tabassum
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Essential Elements of a

Contract
What is offer and Acceptance?

 Offer- When a person (offeror) expresses the willingness to do or


not to do something to obtain the assent of another person
 Section 2(a) of the Contract Act,1872
 Acceptance- When the person (offeree) accepts the proposal
 S- 2(b) of the Contract Act of 1872
 Offer + Acceptance = Promise
 Promise + Consideration = Agreement
What is Consideration and Agreement?

 Consideration- Value of the contract


 Any act or abstinence done by the promisee (offeree) at the
desire of the promisor (offeror)
 S- 2(d), the Contract Act, 1872
 Agreement- Every promise and set of promises forming the
consideration for each other is an agreement
 S- 2(e), the Contract Act, 1872
Let’s see an example…
 Mr. Simon offers Mr. Diamond to sell his guitar for
5,000 taka. Mr. Diamond accepts the offer.
 Now, they have an agreement
 Is this a contract?
 What does it take to consider an agreement as a
contract?
 What is the difference between an agreement and a
contract?
What is a Contract?
 An agreement enforceable by law is a contract
 S- 2(h) of the Contract Act, 1872
 What is ‘Legal Enforceability’?
 There are some criteria those make an agreement as legally
enforceable
 If one or more of the criteria are not fulfilled the contract is not
a valid one
 Legally enforceable agreements are valid contracts
 Agreements not legally enforceable are just void agreements
Legal Enforcement Criteria
 Intention to create a legal relation (not social or moral in
nature)
 Capacity of the parties (Age, mental state, not prohibited by
law)
 Free consent of the parties (not forceful or fraudulent)
 Legality of consideration
 Legality of object
 Not declared by law as void
 Possibility of performance
Example of a void agreement

 Mr. Simon offers Mr. Diamond to sell his guitar for 10


gram of cocaine. Mr. Diamond accepts the offer
 This is an agreement between Mr. Simon and Mr.
Diamond which is not enforceable by law
 A void agreement due to illegal consideration
Types of a Contract
 On the basis of legal enforceability or legal validity a contract is of three types
 Valid Contract- Enforceable by law
S- 2(h) of the Contract Act, 1872
 Voidable Contract- Depends on the party whose consent was not free
S- 2(i) of the Contract Act, 1872
 Void Contract- Not enforceable by law
S- 2 (j) of the Contract Act, 1872

 All contracts are agreements, but all agreements are not


contracts
Thank You!

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