Important Definitions under Indian Contract Act 1872

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Important definitions are provided under Section 2 of the Indian Contract Act, 1872 like contracts, agreements, considerations, etc.

What is Indian Contract Act 1872?

The Indian Contract Act is a law enacted by the Indian Parliament in 1872 that governs the law of contracts in India. The Act lays down the legal rules and regulations that govern the formation and enforcement of contracts in India. It defines the basic concepts of offer, acceptance, consideration, and intention to create legal relations, and outlines the legal consequences of breach of contract.

The Indian Contract Act, 1872 is applicable to all contracts entered into in India, including contracts entered into by individuals, companies, and the government. It is a comprehensive law that covers all aspects of contract law and provides a framework for resolving disputes arising from contractual relationships. The Act has been amended several times to keep pace with changing commercial practices and legal developments.

Important Definitions under Indian Contract Act 1872

The Indian Contract Act, 1872 provides definitions for various terms related to contracts. Section 2 of the Act defines these terms as follows:


As per Section 2(h), a contract is an agreement that is enforceable by law.


As per Section 2(e), an agreement is a set of promises that are made for each other.


As per Section 2(d), consideration refers to the act, abstinence or promise of one party in exchange for the other party’s promise.


Section 2(b) states a promise is formed when a proposal is accepted.


As per Section 2(a), a proposal is an expression of willingness by one party to do or abstain from doing something with the intention of obtaining the assent of the other party.

Promisor and Promisee

Section 2(c) defines the promisor as the party making the proposal, and the promisee as the party accepting the proposal.

Reciprocal promises

Section 2(f) defines reciprocal promises as promises that form the consideration for each other.

Void Agreements

As per Section 2(g), an agreement that is not enforceable by law is termed a void agreement. Such agreements have no legal effect, and parties cannot be compelled to perform their obligations under these agreements.

Voidable Contract

As per Section 2(i), a voidable contract is one that is enforceable by law at the option of one or more parties involved but not at the option of others. In such contracts, one party has the right to repudiate the contract while the other party may enforce it.

Void Contract

As per Section 2(j), a contract that ceases to be enforceable by law becomes void. Such contracts have no legal effect from the outset, and parties cannot be compelled to perform their obligations under these contracts.

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