Article 25 of the Act states that an agreement without consideration is cancelled. However, there are certain conditions listed in section 25, under which a contract is considered valid without consideration. If Vidya Balan concludes a deal in the film Bhool Bhulaiya at the time she considers herself a manjulika, the deal will be cancelled due to her lack of solidity of mind at the time of closing the deal. (Unhealthy Spirit) Basics of a Common Law Contract Sandra Rhames-Smith BUS670 Instructor: Mark A. Cohen June 15, 2015 Foundations of a Contract The foundations of a contract are the construction of a legal agreement that binds a party of two or more individuals, companies, etc. to a binding agreement. In order for the court to be considered legal, it must contain these elements; an offer, acceptance, defined conditions, performance and legal consideration. A contract can be widely signed PROMISE in writing: – The promise is an important part of the agreement. A proposal, if adopted, becomes a promise. Traditionally, “an agreement that is not enforceable by law is considered invalid.” [Section 2(g)] Where both parties to an agreement make a factual error essential to the agreement [section 20]; The taking into account and the object of an agreement are illegal if this is the case: if a 7-year-old boy buys an ice cream from an ice cream seller and gives 10 rupees for it, it becomes a contract.

This is because the boy offers to buy ice cream and the seller accepts the offer that makes it a promise. The counterpart of both was ice and money. Error: If both parties are in a situation of factual error, the agreement becomes void. However, if one or both parties are accused of an error of law, the agreement becomes void. For example, A and B entered into an agreement for the sale of a particular drug. They did not know that such a drug was illegal in India. Your consent is not valid. Fraud: if, in the case mentioned above, Mr Peela knew the actual colour of the car, but lied to Mr Lal; when he would have been guilty of fraud and such an agreement would have been questionable. An agreement for which nothing is prescribed by law to make it enforceable, except for some evidence that the agreement has been reached and that the parties approve it.. .