Humans, being social entities, routinely enter into contractual obligations, either in writing or in fieri through oral communication, in the ordinary course of daily transactions. Illustrative instances of such contracts include employment agreements, lease deeds, service agreements and contract of sale, inter alia (among other things). A contract constitutes a legally enforceable instrument of consensus ad idem (meeting of the minds) between two more parties, creating reciprocal rights and obligations. A valid contract imposes binding obligations upon the contracting parties to perform in accordance with the stipulated terms. In the event of breach of contract by any party, the Indian Contract Act, 1872, provides for legal remedies to the aggrieved party, including but not limited to damages and specific performances. The essentials of a contract are offer and acceptance, mutual exchange between the parties, the competency of parties and the contract must have lawful purpose.

In the Indian Contract Act, 1872 must be “read with” specific legal principals that modify, supplement and provide legal remedies to the litigants. It codified essentials of a valid contract, which include consensus ad idem between the parties, Quid pro quo (something for something) with a lawful purpose. It represents a mutual exchange of value or services between the two parties. It also ensures fairness between the parties.  It explains the essential elements of a valid contract. The act categorizes contract and agreements as Valid agreement. Void agreement, Voidable agreement and unenforceable contract. The Indian contract act, also explains technical defects because of which a contract cannot be enforced in a court of law, for example Lack of registration, Unsound mind, undue influence etc.

01.Coercion – Coercion in contract law, involves threatening to commit any forbidden act, the unlawful detaining, threatening to detain any property- to force someone enter into a contract or signing an agreement. A Contract entered into under coercion is voidable at the option of the coerced party, and the victim can legally cancel the agreement.

02.Undue influence – As per the contract act, A contract is said to be induced by “undue influence” where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other. Simply Undue influence occurs when someone uses their power and forces the other party to enter into an unfair legal agreement.

03.Fraud – Fraud means the acts committed by the party to a contract with intent to deceive another party thereto of his agent, or to induce him to enter into the contract. The following acts comes under fraud.

(i)    The suggestions, as fact, of that which is not true, by one who does not believe it to be true.

(ii) The active concealment of a fact by one having knowledge or belief of the fact.

(iii)                       A promise made without any intention of performing it.

(iv)                       Any other act fitted to deceive.

(v) Any such act or omission as the law specially declares to be fraudulent.

04.Minors - According to the section 11 of the Indian Contract, A minor is legally incompetent to enter into a contract. Any agreement made is Void ab Initio (void from the beginning). Simply it means an agreement, contract or action is legally invalid from the very moment it was created. The law treats this type of agreements, contract as though the contract never existed, and no legal rights or duties arise from it.

Unsound Mind - Section -12 of the Indian Contract Act, defines unsound mind. As per contract law, a person who is unable to understand the terms of a contract or judge its consequences is generally considered as unsound mind person. An agreement made by a person of unsound mind are void. To constitute a valid and binding contract, a party must be sound mind. Some examples of unsound mind are old age, Mental Idiocy, drunkenness, insanity etc.