Contract is Defined as an Agreement Enforceable by Law: What Section of the Indian Contract Act?

A contract is a legally binding agreement between two or more parties, which creates an obligation to do or refrain from doing a particular thing. In India, the law that governs contracts is the Indian Contract Act, 1872. This act outlines the rules and regulations that guide the formation, execution, and performance of contracts in India.

Section 2(h) of the Indian Contract Act defines a contract as “an agreement enforceable by law”. This definition makes it clear that for an agreement to be a contract, it must be enforceable by law. This means that the parties involved must have the legal capacity to enter into the agreement, the consent to enter into the agreement must be free, and the object of the agreement must be lawful.

To understand this definition better, let us look at each aspect of it in detail.

Legal Capacity:

The Indian Contract Act specifies that a person who is of the age of majority and is of sound mind has the legal capacity to enter into an agreement. This means that minors and persons who are not of sound mind do not have the legal capacity to enter into a contract.

Free Consent:

For an agreement to be enforceable by law, the parties involved must have given their consent freely. This means that the consent to enter into the agreement must not have been obtained by coercion, undue influence, fraud, misrepresentation or mistake.

Lawful Object:

The object of the agreement must be lawful. This means that the agreement must not involve any illegal, immoral, or fraudulent activity. If the object of the agreement is illegal or immoral, then the agreement is not enforceable by law.

In conclusion, for an agreement to be considered a contract under the Indian Contract Act, it must meet all the requirements set out in Section 2(h). The parties involved must have the legal capacity to enter into the agreement, the consent to enter into the agreement must be free, and the object of the agreement must be lawful. By meeting these requirements, the contract becomes legally binding, and the parties involved can seek legal remedies in case of any breach.

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