Drafting, Pleadings and Appearances · Drafting of Agreements, Deeds and Documents

Essentials of a Valid Agreement and Contract in Drafting

Updated 11 October 2026 · Fact-checked

Under Section 10 of the Indian Contract Act, 1872, all agreements are contracts if made by free consent of parties competent to contract, for a lawful consideration and with a lawful object, and not expressly declared void. In drafting, you build each of these into the parties, recitals, consideration and execution clauses.

Understand Essentials of a Valid Agreement and Contract

An agreement is a promise or set of promises between parties. A contract is an agreement that the law will enforce. Every contract is an agreement, but not every agreement is a contract. A promise to attend a friend's party is an agreement. It is not enforceable, so it is not a contract.

Section 10 tells you when an agreement becomes a contract. 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 expressly declared void. Read it as a checklist: consent, competence, consideration, object, and not void.

The second paragraph of Section 10 adds a saving rule. Nothing in the section affects any law in force in India under which a contract must be made in writing or in the presence of witnesses, or any law relating to registration of documents. So after the checklist, you must also ask whether another law requires writing, witnesses, stamping or registration for this document.

As a drafter, you turn each essential into text. The opening names parties who are competent. The recitals record the background and show that consent is free and informed. The operative clauses state the consideration and the lawful object. The execution block gives signatures, witnesses and dates. A well-drafted agreement lets a court see at once that each essential is present.

Key rules to remember

Section 10 test: Valid contract = free consent + competent parties + lawful consideration + lawful object + not expressly declared void; Apply every element to the facts. One missing element can leave you with an agreement that is not enforceable.
Agreement and contract: Contract = Agreement + enforceability by law; All contracts are agreements. Not all agreements are contracts.
Saving rule in Section 10: Section 10 does not affect any law requiring writing, witnesses or registration of documents; Check other laws, such as the Registration Act, 1908, after applying the five-part test.
Drafting map: Parties clause → competence; Recitals → background and consent; Operative clauses → consideration and object; Execution block → writing, witnesses; A practical way to link each essential to a part of the document.

How to solve Essentials of a Valid Agreement and Contract questions

Use the same sequence for any question on essentials of a valid agreement or contract, whether it asks for analysis or for a drafted clause.

1Read the facts and identify the parties, the promise and what each side gives or gets.
2State the rule: quote Section 10 of the Indian Contract Act, 1872 in your own words.
3Test each element in turn: free consent, competence of parties, lawful consideration, lawful object, and whether any law expressly declares it void.
4Apply the saving rule: check if any law requires writing, witnesses or registration for this document.
5Conclude clearly: valid contract, or an agreement that is not enforceable, and give the reason.
6If drafting is asked, name the clause or part where each essential appears: parties, recitals, consideration, object, execution.
7Add practical points, such as stamping and registration, only where the facts call for them.

Quickest way: Five-point Section 10 checklist

When to use it: Use it when time is short or the question has a long fact pattern.

Write the five heads on the page: consent, competence, consideration, object, not void.
Tick or cross each head with one line from the facts.
Add a sixth line: any law needing writing, witnesses or registration.
Write the conclusion in one sentence, then add a drafting suggestion for any cross.

Common mistakes in Essentials of a Valid Agreement and Contract

Treating agreement and contract as the same thing.
In daily use both words are interchangeable.
Fix: Say that a contract is an agreement enforceable by law, and show which Section 10 element makes it so.
Listing the essentials from memory and leaving out 'not expressly declared void'.
Students remember only the commonly taught elements.
Fix: Quote the full wording of Section 10 and include the 'not hereby expressly declared to be void' element.
Ignoring the second paragraph of Section 10.
Students stop reading after the first paragraph.
Fix: Always mention that laws requiring writing, witnesses or registration are saved, and check them.
Drafting a consideration clause that only says 'for good consideration'.
Students copy stock phrases without stating what is exchanged.
Fix: State the actual price or promise, the amount in rupees, and when and how it is paid.
Omitting the competence and authority of the signatories from the parties clause.
Students focus on the operative clauses.
Fix: Describe each party fully, and for a company state who signs and under what authority, such as a board resolution.

Worked examples

Example 1

Ravi Traders agrees orally to sell goods to Meena Enterprises for ₹5,00,000. Meena promises to pay within 30 days. Both are adults of sound mind, there was no pressure, and the goods are lawful. Is this a valid contract under Section 10 of the Indian Contract Act, 1872?

Show the solution

Rule: under Section 10, all agreements are contracts if made by free consent of competent parties, for a lawful consideration and with a lawful object, and not expressly declared void.
Consent: the facts show no pressure, so consent is free.
Competence: both parties are adults of sound mind, so they are competent.
Consideration: Ravi gives goods and Meena promises ₹5,00,000, so there is lawful consideration.
Object: the sale of lawful goods is a lawful object, and nothing declares the agreement void.
Saving rule: no law is stated that requires writing or registration for such a sale, so the oral form does not defeat it on these facts.

Answer: Yes. The agreement meets every element of Section 10 and is a valid contract. A written agreement is still advisable for proof of terms.

Example 2

Draft a consideration clause for an agreement in which Anand Pvt. Ltd. sells software services to Bharat Ltd. for ₹12,00,000.

Show the solution

Identify what each side gives: Anand gives the services, Bharat pays money.
State the amount in figures and words, as the exact sum matters for enforcement and stamping.
State the payment terms: date, mode and any instalments.
Link the payment to the promise of services, so that the exchange is clear.
Add a lawful object statement, so the purpose of the agreement is plain.

Answer: Sample clause: 'In consideration of Anand Pvt. Ltd. providing the Services described in Schedule I, Bharat Ltd. shall pay Anand Pvt. Ltd. a total sum of ₹12,00,000 (Rupees Twelve Lakh only) within 30 days of receipt of the invoice, by electronic transfer to the account specified in Schedule II. The parties declare that the Services are for a lawful purpose.'

Exam tips

Quote the wording of Section 10 early. It earns marks and anchors your analysis.
Use the pattern provision, analysis, conclusion, then a drafting point.
Always link each essential to a part of the document: parties, recitals, consideration, execution.
Mention the saving rule on writing, witnesses and registration when the facts involve property or formal documents.
When asked to draft, write the actual clause in full instead of describing it.

Practice questions from Drafting of Agreements, Deeds and Documents

Essentials of a Valid Agreement and Contract in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Essentials of a Valid Agreement and Contract: frequently asked questions

What does Section 10 of the Indian Contract Act, 1872 say?

It says 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 expressly declared void. It also saves any law requiring writing, witnesses or registration.

What is the difference between an agreement and a contract?

An agreement is a promise or set of promises between parties. A contract is an agreement that the law enforces. An agreement that fails a Section 10 element is not an enforceable contract.

How do I draft a consideration clause?

State what each party gives, the amount in figures and words, the payment date and mode, and link it to the promise being paid for. Avoid vague phrases such as 'for good consideration' alone.

Does a contract always need to be in writing?

Section 10 does not make writing a general requirement. It saves other laws that require writing, witnesses or registration. Where such a law applies to your document, you must follow it.