The contract is an essential part of our day-to-day activity, contracts are not only formed between the business but can be between a customer and the company. The contract establishes the objectives as well as the functions of the parties.
A contract is defined in the simplest form in our Indian laws, it defines as the promise maybe t do something or to refrain from doing something. The contract is the product of civilization.
Before the contract law, there were various ways such as through ties of kinship or authority of religion. This showcase that people in earlier times used to have faith in the king or the religion they use to practice they didn't' have any laws which helped to govern the situation, it could also be that in those times there wasn't any requirement for such a law, in those time people used barter system in which transaction got completed at the same time. The Indian contract act was established by the Britishers in the 17th century. In the past few years, things have evolved and amended.
The act mentions the legal requirement to enter into a contract. Section 10 talks about these requirements, it covers that person entering the contract shall be a minor as well as a citizen of the country. Sec3 of the Indian majority act provides that if a person has attained the age of 18 years old. The person should be of sound mind, which means that he should be capable to decide while making the contract (section 12). The person should not be disqualified under any law.
Case Mohori Bibee v. Dharmodas Ghose
In this case, Dharmodas was a minor who had mortgaged his property in the favor of Brahmo Dutt he was the moneylender for the money of Rs. 20,000. Mr. Kedar Nath was representing Mr. Brahmo Dutt, he knew the facts that the Dharmodas was a minor but the agreement mentioned that he was a major. the respondent's mother filed the case. In this, the court held that this contract is void as the party was a minor. Section 7 of the transfer of property act, mentions the person should be competent to contract, this act also requires the person to be competent to the contract, therefore this contract will be void.
Case; AT Raghava Chariar v. Srinivasa Raghava Chariar
In this case, the minor got into a mortgage contract with the age of majority. The minor extended the money but the other party decided not to honor the agreement. The court held that the agreement so enforced is a kind f a promise by the mortgagor who is competent to honor on the other hand the money advanced was by the minor who is performed his action therefore this will be enforceable. But the parties are not competent to contract, which means that the agreement shall be void.
These are the ingredients for making a contract valid, before making a contract one should consider these points.