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INTRODUCTION
Section 10 of the Indian Contract Act, 1872 provides that an agreement in order to be a
contract, must satisfy the following conditions:
(1) The parties must be competent to contract;
(2) It must be made by the free consent of the parties;
(3) It must be made for a lawful consideration and with a lawful object;
(4) It should not have been expressly declared as void by law.
CAPACITY TO CONTRACT
Meaning: Capacity refers to the competence of the parties to make a contract. It is one of the
essential elements to form a valid contract.
Who is competent to contract (Section 11)
every person is competent to contract who-
(A) has attained the age of majority
(B) is of sound mind and
(C) is not disqualified from contracting by law to which he is subject.
ESSENTIAL ELEMENTS
1. Offer and Acceptance
Offer: A clear proposal made by one party (the offeror) to another (the offeree),
indicating a willingness to enter into a contract.
Acceptance: The offeree's unequivocal agreement to the terms of the offer, forming a
mutual consensus.
2. Intention to Create Legal Relations
Both parties must have the intention to enter into a legally binding agreement. Social
and domestic agreements typically lack this intention unless explicitly stated.
3. Consideration
Consideration refers to the value exchanged between the parties. It can be in the form
of money, goods, services, or a promise to refrain from an action.
