August 01, 2016

Indian Contract Act, 1872 regulates the contracts entered in India.Contract law is a unique concept of law which permits two or more individuals or corporates to makes law for themselves.The parties are free to enter into and agree to any terms and undertake any obligations under a contract and once they do, they have to abide by them.

Once there is a consensus ad idem and the parties are agreed to the terms of a contract, then all its terms and conditions are enforceable by the court of law.If minds are met, parties have willingly, with their free volition undertaken certain obligations, then such obligations are enforceable by law.

From this it is understood that, OR we can say that, essence of any contract is meeting of minds.Consensus ad idem, the meeting of minds must be real. In other words, consent must be free. It may be vitiated on account of misrepresentation, fraud, undue influence or mistake.

Formation of the contract

As it is known under the English Law, formation of a contract is initiated with a proposal or offer.All agreements are contracts if they are made by the free consent of the parties, who are competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.

Every promise and every set of promises are forming the consideration for each other is an agreement. When one person signifies his willingness to the other to do or to abstain from doing anything with a view to obtain the assent of the other party, he is said to make a proposal.

To conclude we can say that, three essential elements of a contract are proposal OR offer, acceptance of said proposal OR offer, and consideration. Once a valid contract is entered, it is enforceable.

Novation of contract

Once a valid contract is entered, the parties are free to substitute the same for something else. Such an act is called novation of contract.

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