What is Contract
Contract: Contract is an agreement between two persons declaring their common intention to do or not to do an act. All agreements are contracts if they are made with free consent of the parties competent to make contract for lawful consideration with a lawful object as defined under Section 2(k) of Indian Contract Act of 1872. Sec. 2(h) of the Indian Contract Act defines a contract as “An agreement enforceable by law”.
According to Sir Frederick Pollock, “Every agreement and promise enforceable at law is a contract”.
These definitions resolve themselves into two distinct parts:
First, there must be an agreement. Secondly, such an agreement must be
enforceable by law and an agreement to be enforceable must be coupled with
obligation and the obligation has its source in law.
Ingredients of Contract: An agreement/contract should contain the following:
- Communication of proposal and its acceptance,
- Competence to contract,
- Communication when complete, and
- Revocation of proposal and acceptance.