ASSIGNMENT ON CORPORATE LEGAL ENVIRONMENTSUBMITTED TO: Mrs.Jyoti Shrivastav SUBMITTED BY: Deependra Bisht MBA 4 sem Section (A) for a lawful consideration and with a lawful object. the Sale of Goods Act. In India. with a view to obtaining the consent of that other person towards such an act or abstinence. By implication. And a promise arises when a proposal is accepted. an agreement consists of an 'offer' and its 'acceptance'. It signifies the offeree's willingness to be bound by the terms of the proposal communicated to him. According to the Contract Act.Contract Law The Law of Contracts is the basis of business law because the bulk of transactions of the people engaged in trade. performance and enforceability of contracts and the rules relating to certain special types of contracts like. and Agency. Every agreement begins with one party making an offer to sell something or to provide a service. To be valid an acceptance must correspond exactly with the terms of the offer. The Act lays down the general principles relating to formation. the person is said to be making a proposal or offer. An "agreement" is a contract if 'it is made by the free consent of parties competent to contract.1872. though technically belonging to the Law of Contracts. it must be unconditional and absolute and it must be communicated to the offeror. commerce and industry is based on contracts. etc. An agreement emerges from the acceptance of the offer. Bailment and Pledge. have been covered by separate enactments. An "offer" is the starting point in the process of making an agreement. The Partnership Act. Indemnity and Guarantee. the Companies Act. an agreement is an accepted proposal. the general principles of the Contract Law are the basis for all such contracts as well. " Every person is competent to contract . When one person who desires to create a legal obligation. the second stage of completing a contract. In other words. As per the Indian Contract Act.1872. The contract must be definite and its purpose should be to create a legal relationship. "Acceptance" is thus. The parties to a contract must have the legal capacity to make it. The agreements not enforceable by law are not contracts. a "contract" is an agreement enforceable by law. An "agreement" means 'a promise or a set of promises' forming consideration for each other. the Negotiable Instruments Act. and is not expressly declared to be void'. An acceptance is the act of manifestation by the offeree of his assent to the terms of the offer. communicates to another his willingness to do or not to do a thing. the Law of Contracts is contained in theIndian Contract Act. However. who is of the age of majority according to the law to which he is subject. resulting into an agreement. Offer and acceptance :. . Essential Elements of a Contract Minimum two parties :. and is not disqualified from contracting by any law to which he is subject".There must be an 'offer' and an 'acceptance' to the offer. The Act is not exhaustive since it does not take into its purview all the relevant legislations. Legal obligations :. The consideration may be in the form of money. This 'something' is described in law as 'consideration'. The principal features of the Law of Contract are: The parties to the contract make the law for themselves. A contract without consideration is void. Thus. The person who makes the 'proposal' or 'offer' is called the 'promisor' or 'offeror'. The Law of Contracts is not the whole law of agreements.The parties must intend to create a legal obligation. It does not override customs or usages. One party has to make an offer and other must accept it.A contract is basically a bargain between two parties. the person to whom the offer is made is called the 'offeree' and the person who accepts the offer is called the 'acceptor'. persons of unsound mind and Persons disqualified from contracting by any law are incompetent to contract. each receiving 'something' of value or benefit to them. It is the price for which the promise of the other is bought. Both offer and acceptance should be lawful. While. Consideration is an essential element of a valid contract. Lawful consideration:. minors.The agreement sought to be enforced should contemplate legal relations between the parties to it.Atleast two parties are needed to enter into a contact. and who is of a sound mind. The contracting parties must give their consent freely. This consideration may be past. a contract may be oral or in writing. or legal proceedings as well as wagering agreements. certain contracts are required to be in writing and may even require registration. present or future.the terms of a contract must be such as are capable of performance. The Contract Act declares void certain types of agreements such as those in restraint of marriage. thus.services rendered. undue influence. the same must be complied with. Free consent:. 'Consent' means that the parties must agree about the subject matter of the agreement in the same sense and at the same time. and not expressly disqualified from contracting. it cannot be enforced. but it must be lawful. where law requires an agreement to be put in writing or be registered. it would defeat the provisions of any law (v) causes injury to the person or property of another (vi) opposed to public policy. of a sound mind.Generally. Lawful object:.(i) illegal (ii) immoral (iii) fraudulent (iv) of a nature that. is not enforceable and is. If an agreement is vague and its meaning cannot be ascertained.The object of the agreement must be lawful. fraud.misrepresentation or mistake. Legal formalities:. Certainity and possibility of performance:. the Indian Trusts Act requires the creation of a trust to be reduced to writing.An agreement expressly declared to be void under the Contract Act or under any other law. not a contract.The terms of a contract must not be vague or uncertain. An agreement is unlawful.The parties making the contract must be legally competent in the sense that each must be of the age of majority. Also. if permitted. Consent is said to be free if it is not induced by coercion. or trade. goods exchanged or a sacrifice which is of value to the other party. Not expressly declared void:. if it is:. However. Therefore. An agreement by incompetent parties shall be a legal nullity. Competent parties:. . An agreement to do an impossible act is void and is not enforceable by law. For instance. The absence of free consent would affect the legal enforceability of a contract. is entitled to be reimbursed by the other person When a person finds goods belonging to another person. it is different from unlawful agreements which are forbidden by the law. it is his duty to restore them to the rightful owner. The Act describes the obligations arising under these contracts as 'certain relations resembling those created by contracts'. It is void ab initiobecause it lacks one or more of the essentials of a valid contract. Implied Contract:.A valid contract is a 'contract which satisfies all the requirements of the Act'. Such an agreement does not create any legal relations. justice and good conscience. Some of the transactions that will be considered as 'quasi-contract' under the law are: When a person who is interested in the payment of money which another person is bound by law to pay. express or implied. but the law recognises the contract under certain special circumstances. is liable to repay or return it Where necessaries are supplied to a person. A person to whom money is paid or anything delivered. Valid Contract:. These contracts are based on the principle of equity. by mistake or under coercion.Classification of Contracts Express Contract:-A contract wherein both the offer and acceptance are made in words.It is a contract which does not arise by virtue of an agreement.A contract which is inferred from the conduct of parties or course of dealings between them. who is incompetent to contract such as minors or to someone whom he is legally bound to support. Void Agreement:. and who therefore pays it. the supplier is entitled to recover the price of the property of the incompetent person. Quasi Contract:.The following agreements that have been declared void by the Contract Act: Agreements by incompetent persons Agreements wherein consideration and objects are unlawful .It is an agreement not enforceable by law. An illegal agreement must necessarily be void but a void agreement need not be illegal.etc. spoken or written. However. Such a contract creates rights in personam and is legally enforceable. In other words. the consent of one of the parties is not free and the law regards it as an aggrieved party.etc.A contract which ceases to be enforceable by law becomes void. repudiates the contract.Some of such circumstances which makes a contract void are: An agreement without lawful consideration becomes void A contingent contract to do or not to do something on the happening of an event becomes void when the event becomes impossible When the party. Voidable Contract:. Void Contract:. .The other party does not have any such right. but not at the option of other or others'.A voidable contract is 'an agreement which is enforceable by law at the option of one or more of the parties thereto. Agreements in restraint of marriage Agreements in restraint of trade Agreements in restraint of legal proceedings Agreements the meaning of which are uncertain. an agreement may be enforceable initially and due to certain circumstances may become void subsequently.etc. Thus a contract is not void from its inception. In such a contract. The aggrieved party has the option to either affirm or rescind the contract within a reasonable time. whose consent is not free.the aggrieved party is entitled to recover from the other party the damages which it may have suffered but it must restore the benefits received by it. However.