Contract :

It is an understanding or agreement by a person or a firm to do any work under certain terms and conditions.

The work may be for the construction, maintenance & repair, for the supply of materials, for the supply of labor, etc.

A contract is an agreement which can be enforced by law.

In order to make this agreement valid, there must be a definite offer and equally definite and unconditional acceptance of this offer.

As per The Indian Contract Act, of 1872 section 2(a),

Proposal :

When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal or offer. An offer to proposal must be made “with a view to obtaining the assent of the person to who it is made.

Thus, a simple advertisement or circular stating that certain goods are for sale by tender, is an offer. Similarly, a tender notice inviting tender is also called offer.

Acceptance :

When the person to whom the proposal is made signifies his assent there to, the proposal is said to be accepted. A proposal when accepted, becomes a promise. To binding and effective, the acceptance must be unconditional and absolute. A conditional acceptance amounts to a counter offer.

Essential Requirements of a Valid Contract :

1. Contract should be made by parties competent to contract.
2. Contract should be made by free consent of parties.
3. There should be a definite proposal and its acceptance.
4. Subject matter of the agreement must be legal and definite.
5. There must be a lawful consideration.

The post What is Contract ? Requirements of Valid Contract ? appeared first on Technical Civil.