Contracts

Contracts 

• Contract - An agreement enforceable by law is a contract. 

• All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.

What is a contract? Examples

• I promise to bring chocolates to the whole class. Is there a contract? 

• I promise to give you 100 Rs. if ride your bike to Tiananmen Square and back to ICB in less than 2 hours. Is there a contract? 

• I give you 2 Rs. for your Coca-Cola. Is there a contract? 

• I promise to give you a new bicycle if you agree not to eat Chinese food for one year. Is there a contract?

Definition of a contract 

• A legally binding agreement 

• that means there must be some kind of agreement between two parties 

• However, not because not all agreements all agreements are contracts are legally enforceable 

• legally enforceable means that a court will say that an agreement is a contract

• To decide if an agreement is legally enforceable as a contract, a court will apply the rules and principles of the law of contract 

• Therefore, knowing a little about these rules can help businesspeople to create valid contracts

Essential elements of a valid contract: (Sec. 10) 

1. Agreement - Offer & acceptance 
2. Legal consequences - rights & obligations 
3. Capacity of the contracting parties 
4. Consideration 
5. Legal object 
6. Free consent 
7. Certainty 
8. Possibility of performance 
9. Writing & registration 
10. Not expressly declared to be void.