A brief introduction to the Indian Contract Act 1872

On a daily basis we enter into lots of contracts, from buying a toothpaste to paying bills in hotels. To satisfy our requirements we enter into agreements which may be oral or written, expressed or implied which all results in contracts.
The Indian contract Act, 1872  is applicable to the whole of India except the state of Jammu and Kashmir and came into force from 1^st september 1872.
Section 1 to section 75 of Indian Contract Act deals with the general principles.
The basic or the foundation on which the Indian Contract Act is given below:

1. Offer and acceptance
2. Consideration
3. Capacity to contract
4. Free consent
5. Legality of the object

There are different kinds of contracts which includes valid contracts, void contracts ,voidable contracts, unenforceable contracts and illegal contracts.
‘Contract’ is a word which is derived from a latin word “contractum” which means “drawn together”. It is an agreement between two or more pesons or parties subject to certain terms and conditions for lawful consideration. Example: ‘A’ and ‘B’  are into agreement where, A promised B to sell his house for Rs .10,000/-  and B accepts to purchase it for the said amount and thus it is a contract. (the agreement which is made, must be enforceable by law)
For forming a contract there must be:

1. an agreement
2. the agreement should be enforceable by law

for an agreement:
agreement= offer +acceptance
contract= agreement + enforceability
section 2(e) of Indian contract Act 1872, defines agreemment as “every promise or every set of promises forming the consideration for each other, is an agreement’ and to constitute an agreement three points are to be remembered :

1. There must be at least two parties.
2. There must be a proposal or offer from one person or one party.
3. There must be an acceptance from the other person or party.

Example: ‘A’ offered to sell ‘B’ his house for a particular amount of money and B accepted for the same (to purchase the house for the same amount of money). Here ‘A’ is the offeror while ‘B’ is acceptor . so here there is a proposal or offer and when it is accepted then it becomes a promise.
Difference between contract and agreement :
Contract emerges from an agreement while agreement emerges from the consent of the parties. Contracts are always legal and enforceable by law while agreements may be illegal , moral and may not be enforceable. While every contract is agreement  but not every agreement is contract.
Example: ‘A’ entered into agreement with ‘B’, to kill ‘C ’, here it is a agreement but not a contract as it is not legal to kill a person and thus not enforceable by law.
 
This article has been contributed by Shriya Chandankar, First Year, Symbiosis Law School, Hyderabad