Meaning of contract

The Indian Contract Act, 1872 defines a contract as an agreement that is enforceable by law. It is an agreement which creates legal obligations between two or more parties.

The act defines an agreement as “every promise and every set of promises, forming the consideration for each other.” In simpler terms, an agreement is a meeting of the minds between two or more parties on a specific matter.

What is a promise?

When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise.

The person making the proposal is called the “promisor”, and the person accepting the proposal is called the “promisee”.

For a contract to be legally enforceable, certain elements must be present, such as an offer, acceptance, consideration, intention to create legal relations, capacity of the parties to contract, free consent of the parties, and lawful object and consideration.The Indian Contract Act also recognizes different types of contracts, such as contracts of guarantee, bailment, agency, indemnity, and partnership, among others. These contracts have specific requirements and rules that govern their formation and operation.

Overall, the Indian Contract Act, 1872 provides a legal framework for the formation and enforcement of contracts in India, and it is a crucial piece of legislation that helps to ensure fairness and certainty in commercial and personal transactions.