Ch 2Law of Contract — Class 11 Commercial Law and Preliminaries of Auditing, concept-first.

Law of Contract is the single largest unit in the Semester I (Class XI) paper, carrying 16 of the 40 marks on Part A (Commercial Law).

Agreement is defined in Section 2(e) of the Indian Contract Act, 1872 as "every promise and every set of promises, forming the consideration for each other." In plain language: when one person makes a…

Offer (proposal) — Section 2(a) defines it as: "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…

Section 2(d) defines consideration: "When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or abstai…

Void agreement — Section 2(g): "An agreement not enforceable by law is void." A void agreement is void from the very beginning (void ab initio) — the law never recognised it as creating any obligation…

Capacity to contract means the legal competence of a person to enter into a binding agreement. Section 11 lays down the test: "Every person is competent to contract who is of the age of majority accor…

Section 13 defines consent: "Two or more persons are said to consent when they agree upon the same thing in the same sense" — this is the legal idea of consensus ad idem ("meeting of minds").

Section 23 governs what makes the object or consideration of an agreement lawful. It states that the consideration or object of an agreement is unlawful if: 1. it is forbidden by law; 2.