1.1.1 Meaning
An agreement enforceable by law is a contract. As per Indian Contract Act 1872 “An
agreement is an accepted proposal”. Thus it are often said that a contract is an agreement; an agreement may be a promise and a promise is an accepted proposal. Every agreement in its ultimate analysis, is the result of a proposal from one side and its acceptance by the other. Hence it’s a bilateral transaction.
Illustration
If Prem offers to sell Pummy twenty-five pens for Rs. 20 each to be delivered on Saturday and Pummy agrees to the deal, it is a valid contract. If one party fails to offer something of benefit to the other, there is no contract.
Illustration
If Ram promises to fix Meena's car, there is no contract unless Meena promises something in return for Ram‟s services of fixing the problem of the car.
1.1.2 E-Contract
The latest mode of creating instant contract within and out of doors a rustic is to enter into contracts through the web . This mode is known as E-contract. By exchange of
communication of offer and acceptance between the parties through internet, contracts can be created and therefore the legality and enforceability of the E-contracts is in no way affected by the actual fact that the formation of the contract depended on the electronic record.
1.1.3 Definition
Section 2h of the Indian contract Act of 1872 defines “a contract as an agreement enforceable by law”.
According to Section 2h of the Act there are two main aspects of a contract –
(a) An agreement
(b) Agreement enforceable by law
Some eminent jurists have also made an attempt to define the term contract which areuseful for interpretation of the various provisions of the Contract Act. For more Information on Eminent Jurists click below
In law a contract means the following:
- Existence of two parties.
- Existence of an agreement between two or more parties.
- Existence of a legal obligation between parties who enter into an agreement
Points to be noted:
- All agreements are not contracts; only agreements that give rise to legal obligations are contracts.
- All obligations are also not contracts; only obligations that have legal consequences are contracts.
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