2. Essentials of a Valid Contract (Section 10)

This is the third topic post in Unit I — General Principles of Contract. It builds directly on Definition and Nature of Contract, so read that first if you haven't.

The Problem This Topic Solves

Post 1 showed that Section 10 lists the conditions an agreement must satisfy to become a contract, and briefly named them under "Agreement vs. Contract." But naming a condition isn't the same as knowing exactly when it's satisfied, when it fails, and which case a court cited when it failed. This topic takes each of those conditions and gives it the Section number and leading case an examiner expects.

Section 10 — The Legal Test

Section 10 states: "All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void." Every word here is a separate test — an agreement doesn't get partial credit. Miss even one, and the whole thing fails, either as void or voidable depending on which test it fails.

The Essentials — One by One

1. Offer and Acceptance — Section 2(e) An agreement is a proposal accepted, plus the consideration each side gives the other. Without a matching offer and acceptance, there's no agreement to test in the first place — this is covered in full in the next topic.

2. Intention to Create Legal Relationship The parties must mean for the law to step in if the promise is broken. Post 1's Balfour v. Balfour (1919) showed domestic promises are presumed not to carry this intention.

Rose & Frank Co. v. J.R. Crompton & Bros Ltd (1925) shows the presumption running the other way just as easily. Two companies signed a commercial distribution agreement, but it contained an "honourable pledge clause" stating it was not subject to the jurisdiction of the courts. Even though it was a business deal, the House of Lords held there was no intention to create legal relations — the clause rebutted the usual commercial presumption. Lesson: courts look at what the parties actually intended, not just whether money is involved.

3. Free Consent — Sections 13–14 The parties must agree on the same thing in the same sense (Section 13), and that agreement must be free from coercion, undue influence, fraud, misrepresentation, or mistake (Section 14).

Ranganayakamma v. Alwar Setti (1889) — a widow was told she could not remove her deceased husband's body for funeral rites unless she adopted a son on the spot. She adopted under this pressure. The Madras High Court held her consent was caused by coercion, and the adoption was set aside. Coercion doesn't need a weapon — a threat against something the person values is enough.

4. Capacity of Parties — Section 11 A party must be a major, of sound mind, and not disqualified by any law from contracting.

Mohori Bibee v. Dharmodas Ghose (1903) — a minor mortgaged his property to a moneylender to secure a loan. The Privy Council held the mortgage was void ab initio, not merely voidable, because a minor has no capacity to contract at all under Section 11. It also held Section 65 (restitution) doesn't apply, since it presupposes a valid contract existed in the first place — so the moneylender couldn't even recover the money lent. This is the case that fixes the rule: a minor's agreement is void, never voidable.

5. Lawful Consideration — Sections 2(d), 25 There must be "something in return," and it must be lawful. The full depth of this rule — what counts as valid consideration, and the exceptions to "no consideration, no contract" — is covered in its own topic (Consideration — Salient Features and Exceptions); here it's enough to know it's one of Section 10's non-negotiable ingredients.

6. Lawful Object — Section 23 The purpose of the agreement must not be forbidden by law, defeat any law's provisions, be fraudulent, injure a person or property, or be immoral or opposed to public policy.

Pearce v. Brooks (1866) — a coachbuilder let a carriage to a woman he knew was a prostitute, knowing she would use it to attract clients. When she failed to pay, he sued for the hire charges. The court refused to help him recover anything, since the object of the contract was immoral. A perfectly valid-looking hire agreement fails Section 10 the moment the underlying purpose is unlawful.

7. Agreement Not Expressly Declared Void — Sections 24–30 Even if every other test is passed, the Act itself strikes down certain categories outright — agreements in restraint of marriage (Section 26), in restraint of trade (Section 27), in restraint of legal proceedings (Section 28), and wagering agreements (Section 30).

Madhub Chunder v. Rajcoomar Doss (1874) — a trader agreed to pay a competitor if the competitor would stop doing business in the same locality. When the competitor sued to enforce it, the court held the agreement was void under Section 27 as a restraint of trade, regardless of how reasonable the deal looked to both sides.

8. Certainty and Possibility of Performance — Sections 29, 56 The Act's own illustration to Section 29 makes the point directly: "A agrees to sell to B 'a hundred tons of oil.' There is nothing whatever to show what kind of oil was intended. The agreement is void for uncertainty." Section 56 adds that an agreement to do something impossible in itself is void from the start.

So the essentials, read together as one test, are: Offer + Acceptance → Intention to Create Legal Relations → Free Consent → Capacity → Lawful Consideration → Lawful Object → Not Struck Down by Sections 24–30 → Certain and Possible to Perform. Fail any one link, and Section 10 is not satisfied.

Essentials at a Glance

Essential	Governing Section(s)	Leading Case	If Missing
Offer & Acceptance	Sec 2(e)	—	No agreement at all
Intention to create legal relations	Not codified — case law	Balfour v. Balfour; Rose & Frank Co.	Agreement only, not a contract
Free consent	Sec 13–14	Ranganayakamma v. Alwar Setti	Voidable (usually)
Capacity of parties	Sec 11	Mohori Bibee v. Dharmodas Ghose	Void
Lawful consideration	Sec 2(d), 25	—	Void
Lawful object	Sec 23	Pearce v. Brooks	Void
Not expressly declared void	Sec 24–30	Madhub Chunder v. Rajcoomar Doss	Void
Certain & possible	Sec 29, 56	Sec 29 illustration (oil example)	Void

A Practical Example

Hari, aged 17, borrows ₹50,000 from a lender and signs a promissory note promising repayment with interest. When the lender sues to recover the money, the agreement fails at the very first gate that matters here — capacity (Section 11) — because Hari is a minor. Following Mohori Bibee, the note is void ab initio; the lender cannot even fall back on restitution.

Now change the facts: Lakshmi, an adult, agrees to sell her flat to Meena, also an adult, for ₹40,00,000, in writing, with no pressure on either side, for a lawful purpose. Every one of Section 10's tests is satisfied — offer and acceptance, intention to be bound, free consent, capacity, lawful consideration, lawful object, not struck down by Sections 24–30, and a certain, performable promise. This is a valid, enforceable contract.

MUST KNOW

• Section 10 — the master test for a valid contract
• Section 11 — capacity; Mohori Bibee v. Dharmodas Ghose — minor's agreement is void, not voidable
• Sections 13–14 — free consent; Ranganayakamma v. Alwar Setti — coercion
• Section 23 — lawful object; Pearce v. Brooks — immoral object defeats an otherwise valid-looking agreement
• Sections 24–30 — categories the Act declares void outright; Madhub Chunder v. Rajcoomar Doss — restraint of trade
• Sections 29, 56 — certainty and possibility of performance

SHOULD KNOW

A minor's agreement being void (not voidable) is one of the most commonly tested traps in exams — students often confuse it with a voidable contract under Section 2(i), where the contract is enforceable until the aggrieved party chooses to avoid it. A minor never gets that choice, because there was never a valid contract to avoid.

Quick Revision Points

• Section 10 = Offer + Acceptance → Intention → Free Consent → Capacity → Lawful Consideration → Lawful Object → Not Void under 24–30 → Certain & Possible
• Mohori Bibee v. Dharmodas Ghose — minor's agreement is void ab initio, no restitution either
• Ranganayakamma v. Alwar Setti — coercion doesn't require physical force
• Pearce v. Brooks — an immoral object kills an otherwise ordinary-looking contract
• Rose & Frank Co. — even a commercial deal can rebut the "intention to create legal relations" presumption if the parties say so expressly
• Missing one essential ≠ a weaker contract — it's either void or voidable, never "partly enforceable"