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Thursday, December 13, 2012

What are the essentials of a valid legal agreement?

Q . What are the essentials of a valid legal agreement? (2001),(1998),(1998 Supplementray),(19995)

1. Introduction:
Facts which create, transfer or destroy rights are called vestitive facts of all vestitive fats, in the law are the most important and among them, agreement take the first place. Great importance is attached to agreement between the parties. That is partly due to the that agreement are evidence of right and justice and parties their rights and liabilities by their own consent.

2. Meaning Of Agreement:
“Agreement can be defined as the expression by two or more person communicated each to the other (or others) of a common intention to affect the real relation between them.”

3. Essentials Of Agreement:
An agreement involves the following essential elements.

I. Plurality Of Persons:
There must be at least two parties make an agreement. One person cannot enter into an agreement with himself.

II. Common Intention:
All the parties must have a distinct common intention.

III. Communication:
Each party must communicate his intention to the others concerned. A communication is said to be completed when it comes to the knowledge of the person to whom it is made.

IV. Affecting Legal Relations:
The common intention must be to affect legal relations. Not every promise amounts to agreement. To constitute an agreement in a legal sense, the promise must intend to enter into or legal relations.

A promise to play tennis with another is not an agreement which will be recognized by the law. Such a promise belongs to the social and not to the legal sphere.

V. Relation Between Parties:
The legal relations intended to be affected must be those of the parties.

4. Classes Of Agreements:
Salmond divides agreement into four classes.

I. Contracts:
Contracts create right and obligation among the parties in person am. It creates a legal tie of a personal right and that tie binds the parties. It imposes liabilities upon on one except the thereto Salmond observes to do that to constitute a contract, there must be a promise to do a certain act as a legal duty.

II. Grants:
Grants are agreement by which rights other than contractual rights are created e.g., leases, mortgages etc.

III. Assignments:
Agreements which transfer right are called assignments e.g., sales or gifts etc.

IV. Releases:
There are agreement which extinguish rights and those are known as releases.

5. Kinds Of Agreements:
Following are two kinds of agreements:
I. Valid
II. Invalid
I. Valid Agreement:

A valid agreement is one which is enforced by the Court of law of the country. It is in accordance with the true intention of the parties. It can enforced by either of the parties.

II. Invalid Agreement:
Invalid agreement are those which have some defect in them and that defect prevents them form being fully operative.
A. Kinds Of Invalid Agreements:
Invalid agreement are of two kinds:
(i) Void
(ii) Voidable
(i) Void agreements:

Void agreement are those which are not recognized by law at all. The will of the parties dose not matter in such cases. It is unenforceable form the very beginning and can never be enforced.

(ii) Voidable agreement:
A voidable agreement is one which by reason of some defect in its origin is liable to lose its effect at the option of one or more parties. It is not null and void form the very beginning but it can challenged by a party concerned and it that case it becomes void form the date on which it was entered into. The effect of nullification is retrospective and not prospective.

B. Difference Between Void And Voidable Agreement:
(i) As to Recognition:
Void agreement are not recognized by law.
Voidable agreements are recognized and enforceable by law until party concerned challenged it.
(ii) Enforceability:
Void agreement are unenforceable form the very beginning.
Voidable agreement becomes unenforceable when the party repudiates it.
(iii) Option of party:
Void agreement cannot be enforced even if both the parties wishes to do so.
Voidable agreement are enforceable at the option of one of the parties thereto but at the option of the other.

6. Causes Which Render Agreement Invalid:
Salmond points out following defects which make an agreement invalid.

I. Incapacity:
Incapacity of the parties may render an agreement invalid. In the eye of law certain person are
not competent to enter into contracts and consequently contracts by them are invalid e.g., contracts entered into by minors lunatics.

II. Informalities:
There are certain agreement which require certain legal formalities to be fulfilled and if those formalities are not fulfilled the agreement becomes invalid.

The want of written agreement, the non-registration of an agreement or the omission of the signatures of the parties may make an agreement invalid.

III. Illegality:
Some agreements are declared to be invalid by law as they are immoral or against public policy.

Wagering contracts or agreements in restraint of trade.

IV. Error Or Mistake:
An agreement may become invalid on account of some error or mistake. A mistake may be either essential or unessential.
(a) Essential Mistake:
In an essential mistake, the parties do not in reality mean the same thing in the same sense.

Examples :
If ‘X’ agrees to sell land to ‘Y’ and which ‘X’ is thinking of one piece of land. ‘Y’ things of another piece of land, agreement becomes invalid on account of an essential mistake.
(b) Unessential mistake:
An unessential does not relate to the nature or contents of the agreement, but only to some external circumstances which induced one party to give his consent and which does not make the agreement invalid. It is based on the principle of “Caveat Emptor” (Let the buyer beware) so it is the duty of the buyer to beware and if has failed to do so, he cannot be allowed to take advantage of his own mistake.

V. No Free Consent:
An agreement may become invalid if the consent of any of the parties is not free A consent is not free when it is obtained by means of compulsion, under influence or coercion.

VI. Want Of Consideration:
Want of consideration an agreement invalid.

According to Pollock:
“Consideration is the price for which the promise of the other is bought and the promise thus given for value is enforceable.”
The consideration must be valuable although it may need not be adequate.
According to section 25 of the contract Act, agreement without consideration is void, but there are following exceptions to this general rule.
(i) Agreement on account of natural love and affection.
(ii) Agreement to compensate for past voluntary service.
(iii) Agreement to pay a time barred debt.
(iv) Agreement to give something as gift.
(v) Agreement to act as agent.
(vi) Agreement to remit by the promise.
(vii) Agreement to donate.

7. Conclusion:
 To conclude, I can say, that an agreement is a private declaration of the rights and duties of the parties concerned. Generally they are enforced by the Courts and for this ,an agreement has to fulfil certain requirements and if not they are rendered invalid.


  1. i am a first year student at saut main i matter of facts i appreciate the notes.


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