Agreements admin June 9, 2023
Contracts

To ensure the validity of a contract, it is essential that it meets the necessary legal requirements for enforceability. Lead India boasts a team of skilled lawyers who are readily available to draft contracts, meticulously considering the relevant legal considerations. We specialize in crafting various types of agreements, tailored to meet your specific needs and objectives.

Components
  1. Contracts in Property Matters
  2. Contracts in Financial Agreements
  3.  Sales and Purchase Contracts
  4. Contracts in Employment Agreements
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Contracts

The particular category of Agreement includes stipulations and provisions that hold legal weight and can be upheld by a court of law. In accordance with Section 2 (h) of the Indian Contract Act 1872, a Contract is described as “An Agreement that can be enforced by law.” According to Section 2 (e) of the Contract Act 1872, “Agreement” is defined as “any commitment or collection of commitments, which mutually serve as consideration for one another.

Essential Components of Contracts
  1. Mutual Agreement

Both parties must willingly enter into a contract, fully understanding and agreeing to its terms.

  1. Offer and Acceptance

One party presents an offer, and the other party accepts the offer, demonstrating their agreement to the terms of the contract.

  1. Consideration

There should be a mutual exchange of value or benefit between the parties involved. If there is no exchange of value, it may be considered a gift rather than a contract.

  1. Capacity to Contract

Each party must have the legal capacity to enter into a contract, meaning they should not be a minor, mentally incapacitated, or under the influence of drugs or alcohol.

  1. Legality of the Contract

The contract must pertain to a lawful subject matter and not violate any public laws or policies established by the state or federal government.

Categories of Contractual Arrangements
    1. Formation-based Classification:
    • Implied Contracts: These contracts do not involve explicit conversation or expression but imply mutual obligations.
    • Express Contracts: These contracts explicitly state the offer, acceptance, and terms of the agreement.
    • Quasi Contracts: These contracts are not created through offer and acceptance but are imposed by law to prevent unjust enrichment.
    1. Consideration-based Classification:
    • Bilateral Contracts: These contracts involve the exchange of consideration where both parties provide goods, services, or money.
    • Unilateral Contracts: These contracts involve an offer made by one party, and consideration is given upon acceptance through performance.
    1. Execution-based Classification:
    • Executed Contracts: These contracts are fully performed, and all obligations have been fulfilled.
    • Executory Contracts: These contracts are yet to be fully performed, and obligations are to be fulfilled in the future.
    1. Validity-based Classification:
    • Valid Contracts: These contracts meet all the necessary requirements and are enforceable by law.
    • Void Contracts: These contracts lack one or more essential elements, making them unenforceable from the beginning.
    • Voidable Contracts: These contracts are initially valid but can be voided by one party due to lack of free consent or undue influence.
    • Illegal Contracts: These contracts involve illegal subject matter and are void from the outset due to the illegal nature of the object.

    These alternative sentences provide an overview of the different types of contracts based on various classification criteria such as formation, consideration, execution, and validity.

Differentiating Between Contracts and Agreements

“All Contracts are Agreements but all Agreements are not Contracts.”

CONTRACTAGREEMENT
It is an agreement enforceable by lawA promise or set of promises accepted by parties involved in the agreement
The contract is legally enforceableIt may or may not be enforceable
The contract has to create some legal obligationAn agreement does not create a legal obligation
Section 2 (h)Section 2 (e)