INTRODUCTION TO CONTRACTS AND AGREEMENTS
: According to the Indian contract, all good conditions of the contract are mentioned
under the Indian contract act, of 1872. A contract arises between two parties and it is enforceable by the
law. In simple words, it may be stated that all contracts are agreements but all agreements are not
contracts. Agreements that are enforceable by the law and fulfill all the lawful conditions are
contracts. In addition, all agreements are not contracts because they are not enforceable by law
and both the parties in agreements are bound to lawful conditions in the eyes of law. A contract is an
agreement that is enforceable by law. A contract or an obligation to perform a promise may arise in
the following way:
1. BY AGREEMENT OR CONTRACT
2. BY STANDARD FORM CONTRACT
3. BY PROMISSORY ESTOPPEL
BY AGREEMENT AND CONTRACT:
The most common way of making a contract is through an
agreement. The two parties agree to something through mutual negotiations. When one party makes
offer and other accepts a proposal is a contract between two parties, which may be enforceable by
law.
STANDARD FORM CONTRACTS:
The other most important way of making a contract is a standard form
of contract. In the modern age, some persons, institutions, or establishments such as insurance
companies or railways may have to enter into a very large number of contracts with thousands of
contracts. They cannot possibly negotiate individually with persons with whom the contracts are to
be made. On the other hand, contracts with pre-drafted matters are generally prepared by one party
which the other has to agree to.
BY PROMISSORY ESTOPPEL: The other main common type of contract is through promissory
estoppel. Sometimes a contract is made without an agreement and contract in the strict sense of
the term, but a person who makes a promise may become bound because of the application of the equitable
doctrine of estoppel.
AGREEMENT: According to the section 2(e)of the Indian contract act,1872 defines agreement-Every
promise and every set of promises forming the consideration for each other in an agreement.In an agreement, there is the promise of both sides from the parties. For instance-A wants to deliver his watch
to B, and in promise, B agrees to pay a sum of Rs.300 to A. It is a type of agreement.
CONTRACT: According to section 2(h) of the Indian contract act, of 1872 defines a contract-An agreement
which is enforceable by law as a contract. An agreement is a contract even if both parties are
able to fulfill the lawful conditions that are mentioned under section 10 of the Indian contract
act,1872.For instance-A want to sell his car to B at the sum of Rs.2 lac.But due to circumstances of
the case it was found that B is a minor person.Therefore,It is void contract.Contract with minor party
is void ab initio.
All agreements are contracts if they are made by free consent, lawful object and
subject, parties in the contract are competent to each other.
CLASSIFICATION OF CONTRACTS: Contracts are classifieds according to their subject matters, their
parties, their form( whether contained in deed in writing, whether express or implied), and their
effect(whether bilateral or unilateral, whether valid, void or unenforceable). Section 2(h) of the Indian
contract act provides an agreement that is enforceable by law and is a valid contract in the eyes of
law. The agreement is valid even if made with free consent, further it is voidable if consent is made through
coercion, undue influence, mistake, fraud, or misrepresentation. The agreement is not valid even if the
motive of all parties is to perform illegal activities. In simple words, it may be stated that agreements
are contracts even if they are made with free consent or lawful consideration, or lawful subjects. It is also
made clear that this will not affect any law in force and not expressly repealed by the contract act, by
which any contract is required to be made in writing or in the presence of a witness or any law relating
to the registration of the documents. Some of the contracts which have to be reduced to writing are
the contracts mentioned in the section25 of the Indian contract act,1872. Furthermore, before any
contract will be enforced, it is essential that the terms of the contract must be clear, definite, certain, and complete and the contract must be free from doubt, Vagueness, or ambiguity. The classification of
the contracts is given below-
VOID AGREEMENTS: According to section 2 (e)of the act,1872 defines agreements which is not
enforceable by law is void agreements. All void agreements are void-ab-initio.For instance-
agreement with a minor person is void ab initio.Section 24 to 30 of the Indian contract act,1872
makes a specific mention of agreements which is to be void such as agreement without
consideration, agreement in restraint of marriage, agreement in restraint of trade.
VOIDABLE CONTRACTS: According to section 2(i) of the act,1872 an agreement is enforceable by
law at the option of one or more parties but it is not at the option of another party. On the other hand, it
is valid but later it shall be voidable due to the circumstances or non-performance of one or more
parties.
ILLEGAL AGREEMENTS: There are certain agreements that are IIegal in the eyes of law.An illegal
agreements may be distinguished from a mere “void” agreement which may not be opposed to
public policy. An illegal agreement is an agreement that is forbidden by law or is against the public
policy. These kinds of agreements are unenforceable in the eyes of law. The main motive for these
agreements are to harm or injure the intention of other parties. It is a void agreement. To distinguish
an illegal agreement from another void agreement, it is stated that while in a case of void agreement a
the collateral transaction may not also be void,but in the case of illegal agreement,a collateral transaction is
also held void.Parties in illegal agreements are punishable under Indian penal code, of 1860.These types
of agreements are very different from void agreements. For instance,an agreement which tends to
corrupt public life or an agreement to defraud public revenue is illegal. Such an agreement is patenly
opposed to public policy. Moreover, the law forbids the making of such agreements.
CONCLUSION: Under section 2(h) of Indian contract act,1872 mentions the meaning and definition
of contract.It should be stated that performing of lawful conditions will lead to valid formation and
creation of the contract.Parties in contract are bound to perform these kinds of provisions that are
mentioned under indian contract act,1872.Performing of wrongful or unlawful provisions generates
void types of contracts.
