The term contract is defined as an agreement between two or more parties which has a binding nature, in essence, the agreement with legal enforceability is said to be a contract. It creates and defines the duties and obligations of the parties involved.
Process of Contract
Contract is formed in 3 steps given below: –
Offer + acceptance = Promise
Promise + consideration = Agreement
Agreement + enforceable by law = Contract
TYPES OF CONTRACTS
• Valid Contract- An agreement which is enforceable by the law is a contract according to Section 2(h) and it is also termed as a valid contract. However, the appropriate definition of the same have been provided in Section 10 wherein the essentials are being provided in order to enforce the contract
• Voidable Contract– Section 2(i) of the Act defines a contract which is voidable. An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other, is a voidable contract.[ix] The term free consent has been defined in Section 14 of the Act as an essential ingredient of a valid contract.
• Void Contract- A void agreement is an agreement which is not even enforceable at the option of either party and is void ab ignition. Section 2(g) of the Act defines the meaning of a void agreement.
• Unenforceable Contract- This contract is the one which cannot be enforced due to some technical issues and it was valid earlier. It is could be because of the absence of writing, registration, time-barred by the law of limitation or some other issues.
• Illegal/unlawful Contract- The Section 23 of the Act provides some conditions where an agreement can be enforced but it is unlawful or it is illegal. A difference is needed to be made between void contracts and illegal contracts.
SCOPE OF CONTRACT
The scope of the contract defines all aspects of the document. Contracts have different forms, and the amount involved ranges from small to large amounts. Some contracts last for years while others have shorter deadlines. The materials found in contracts also vary depending on their purpose.
There are many aspects of commercial law, and sometimes it is difficult to define all areas. Typically, commercial law practice involves human research as it relates to, but is not limited to, contracts, sale of goods, taxation, insurance, and rental.
