One myth that we have about contracts is that anything upon which two people agree is a contract. This is a mistaken view, and the existence, validity, and enforceability of contracts are based on the satisfaction of certain legal requirements.
In our daily life, we enter into multiple contracts like a matter of habit that we are not even aware of. From the simple metro ticket we buy on the way to our office to complex business negotiations that we make, all are contracts.
A contract can be either oral or written or by conduct. A written contract is not always necessary, but mostly business contracts are written to reduce the risk of disputes.
Some contracts may require written form or attestation to be legally valid, such as a witness confirming the parties' signatures.
There is a distinction between the enforceability and validity of contracts. Additional procedural requirements like stamping or registration may be necessary for enforceability.
Intention to create a legal relationship:
Parties must intend to create legal obligations. Mere promises made casually may not create legal duties.
Offer: The process begins with one party making an offer to another, expressing willingness to be bound by specific terms if accepted.
For a contract to form, the offer must be accepted without modification, adhering to the "mirror image" rule.
Offers and acceptances can be conveyed through various means, including implied actions or written communications.
Both parties must agree on the essential terms of the contract for it to be enforceable.
Every contract must involve some form of consideration, where both parties receive something of value.
Certain types of consideration are deemed unlawful, such as those against public policy or illegal activities.
Certain individuals, such as minors or those of unsound mind, may be incapable of entering into contracts.
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