Contract

An agreement enforceable by law is a contract.

The definition of contract has two parts, i.e. “Agreement” and “Enforceable by law.”

When a proposal is offered to a person or party and the same is accepted by the person or party to whom it is offered, and then it becomes an agreement.

When an agreement gives rise to a legal obligation, then it becomes a contract. Agreements of social, moral or religious nature, do not give rise to legal obligations, so they can not be called contracts. For example, a promise to meet together at a party is not a contract. A contract must have a legal side, which is liable to suit in case of breach of contract. A government enterprise or a body which is authorized and regulated by the government (in some or another way) and which is appointed by Government and which has a national interest and which is contributed by a national fund must enter into an agreement with a proper “contract.”

An improper contract can be “voidable” or “void” or “unenforceable” or “unlawful”, depending upon the nature of the agreement.

Importance of Contract:

·??????Contracts are required in firms, regardless of size or market share, to protect information and keep unscrupulous investors out.

·??????Preventing misunderstandings: Misunderstandings can develop in any type of business for a variety of reasons. It has a significant influence on the business and has a negative impact on the business.

·??????Assuring secrecy: A contract might include a confidentiality provision that protects the parties' sensitive information.

·??????Ensuring safety and security: Because it specifies the contract's duration and the duties of the parties, the contract is critical to assuring the parties' security.

·??????Acting as proof of specifics and mutual relationships: Contracts are generally used to record specifics that both parties have agreed upon.

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Essential elements of a valid contract:

1)???Offer and acceptance

2)???Intention to create a legal relation

3)???Lawful object

4)???Lawful consideration

5)???Capacity of the parties

6)???Free consent

7)???Writing and registration: A contract may be in writing or oral. But in some certain cases, a contract will be valid, only when it is properly written or/ and registered. Similarly, some other acts also demand a written contract, which may be required to be registered. For example, an agreement for a sale of immovable property in India must be in writing and registered under the Transfer of Property Act, 1882 (The act mentioned is applicable in India).

8)???Certainty

9)???Possibility of performance

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Contracts in different countries:

Three basic essentials to the creation of a contract are as follows:

1)????????????Agreement;

2)????????????Contractual intention; and

3)????????????Consideration

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The body of legislation in England and Wales that governs contracts with legal force is known as English contract law which follows the above basic essentials of the contract. It shares a heritage with nations across the Commonwealth (such as Australia, Canada, and India), from membership in the European Union, continuing membership in Unidroit, and to a lesser extent the United States, thanks to the lex mercatoria or the Law Merchant of the mediaeval period at Europe and the activism of the judiciary during the industrial revolution.

The law of contract is mentioned in the Indian Contract Act, 1872. The definition of a contract is mentioned in Section 2 (h) of the Indian Contract Act. A valid contract must have certain elements which are mentioned in Sections 10, 20 and 56.

The American Law Institute's Restatement of Law, Second Contracts outlines the majority of the principles of the common law of contracts in the United States of America (USA). The Uniform Commercial Code is a corpus of statutory legislation that controls significant kinds of transactions. Its original articles have been adopted in practically every state in the United States.

Although this is changing as the two systems continue to converge, Brazilian contract law and drafting practice mostly follow European customs.?Contracts may occasionally be subject to foreign law, and parties to international agreements now typically have the option of choosing a foreign court to hear their legal problems. The Vienna Convention for the Sale of Goods includes Brazil as a party. Although incoterms are often used in transactions, not all of them are acceptable in Brazil.

As per the Law of Contracts in Nigeria, a contract between two parties cannot be enforced by a party who has not provided consideration, with a contract under seal being the sole exemption. In order to assure that both parties would profit, a binding contract needs an exchange of promises. Since consideration is a fundamental component of contracts, it is crucial to understand what exactly constitutes consideration and what does not.

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