The Indian Contract Act came into existence on 1st September 1872. Section 2(h)of the act defined a Contract as an agreement enforceable by law. According to section 2(e) of the act, a set of promises forming consideration is an agreement. The contract refers to an agreement between the parties. A contract can be oral or written but oral contracts have risked so they should be avoided. There are many types of contracts like a valid contract, void contract, and voidable contract. In the corporate field, the scope of contract law is very bright nowadays as young lawyers are more attracted to the corporate field. Many Online legal certification courses are available that help in brushing the knowledge of contract law. Law students should definitely attend these online legal courses so that they can better understand the concept and scope of a career as a contract lawyer.
Nature of Contract Law - The contract is the one which is seen in daily lives just not in the corporate world. It’s the basis of every transaction that is being made in the daily routine. This branch of law determines the situations in which the parties who entered into a contract are legally bound by law. A contract is an agreement between two parties which is enforceable by law by which rights are obtained on both sides. There are a few essential elements which should be present so to make a contract like an offer, acceptance, lawful consideration, free consent and capacity to enter into a contract. If any essential of a contract is missing then it won’t be considered a valid contract.
Essentials of a contract - There are a few essentials of a contract without which it can not be considered a valid contract. Following are the essentials of a valid contract -
Offer and Acceptance: When one party gives a proposal to another it is known as an offer and when that proposal is accepted then it is known as acceptance. This is the foundation of a contract. Both parties which are involved in this should be legal like a company or organisation.
Free Consent: The parties are said to consent when they agree on the same thing in the same sense at the same time and that consent should be free which means that parties should give consent by their own will and not by undue influence, fraud etc. Without free consent, the agreement will not be considered legally binding.
Lawful Consideration: There should be some consideration in an agreement to make it a valid contract. Consideration means something in return. This consideration should be lawful and genuine.
Intention to create a legal relationship: There should be intention on both sides to enter into a contract then only it will be considered a valid contract.
Capacity to enter into a contract: The parties entering into a contract should have the capacity to enter into a valid contract. The person entering into a contract should be:
- Of sound mind
- In the age of the majority
- Is not disqualified from entering into a contract.
Purpose of Contract Law - The fundamental purpose of contract law is to provide a framework within which individuals can freely contract. The contract can legally bind the contracting parties by creating laws that apply only to the parties entering into the contract and subsequent legally binding laws. English contract law has evolved over the centuries as a common law strongly based on precedents.
The main purpose of the contract is to formalize new relationships of parties and this law highlights the rules which are to be followed by both the parties entering into a contract. Today most contracts are signed by companies or organisation,s not individuals. People signed normal contracts of buying and selling property or offering a job offer etc. Businesses sign legal contracts in masses with partners, customers etc. These contracts are the backbone of every commercial relations.
Scope of Contract Law -The scope of contract law is different in every country. The contract law defines the basic contractual rules and rights which are highlighted from the agreement which is made between two parties it is a promise that the obligations mentioned in the contract will be performed according to the procedure. An obligation in this law needs the existence of obligor and obligee which is the major feature of contract law. An obligor is a person who is legally bound to perform that obligation and Obligee is a person who benefits from the means for whom the obligation is. This feature makes contract law different from other criminal obligations.
Contracts come in different forms and involve small to large amounts. Some contracts last for years, others have shorter terms. The materials found in the contracts also vary according to their purpose. There are many aspects of commercial law and it is sometimes difficult to define all areas. The practice of commercial law typically includes human research relating to, but is not limited to, contracts, the sale of goods, taxes, insurance and rentals.
Conclusion - A contract is a legally binding element on both parties while there is an existence of consideration and the agreement is legitimate. Otherwise, the contract is void from the beginning. The Indian Contract Act, 1872 completely deals with contracts and gives an explanation of what amounts to a valid contract and what the essential elements of the contracts are. This document deals with various parts of contracts and how it is used with respect to personal and business relations. And how contracts are tested by courts impartially and individually to find out the intention behind the making of a contract and test their legitimacy or legal validity. The types of contracts that are being provided are indeed the main types and are being categorized according to the Indian Contract Act, 1872. The scope of the contract is widening and it largely differs from one aspect to another. Various online platforms are providing Online law certification courses regarding the Indian Contract Act 1872. These online legal courses help law students to understand and remember contract law. There is a wide scope of Contract law for new law graduates as the culture of working in the legal corporate world is rising day by day.