Business Laws and Management · Elements of Law of Contracts

Essentials of a Valid Contract under Section 10

Updated 11 October 2026 · Fact-checked

Under Section 10, 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. Check each condition one by one. If any one fails, the agreement is not a valid contract.

Understand Nature and Essentials of a Valid Contract (Section 10)

An agreement is a promise or set of promises that the parties make to each other. 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 meet a friend for tea is an agreement. The law will not enforce it.

Section 10 tells you when an agreement becomes a contract. It says all agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration, with a lawful object, and are not hereby expressly declared to be void.

Think of it as a checklist. First, was consent free? Consent caused by coercion, fraud or misrepresentation makes the contract voidable at the option of the party whose consent was so caused (Section 19). Second, were the parties competent? Third, is there consideration, and is it lawful? Fourth, is the object lawful? Fifth, has the law declared this kind of agreement void, for example for uncertainty or restraint of trade?

Section 10 also has a second part. It does not affect any law in force in India that requires a contract to be made in writing or in the presence of witnesses, or any law on registration of documents. So an oral contract is valid in general, but where a law demands writing, witnesses or registration, you must follow it.

Note what is missing from the section's list: the words 'offer and acceptance' and 'intention to create legal relations' are not in it. Study material treats them as part of the wider essentials. For the MCQ, learn the exact words of Section 10 and then the extra points from your textbook.

Key formulas to remember

Section 10 checklist: Valid contract = agreement + free consent + competent parties + lawful consideration + lawful object + not expressly declared void; All conditions must be present together. Failing any one stops the agreement from being a valid contract.
Agreement and contract: Contract = agreement enforceable by law; Every contract is an agreement. Not every agreement is a contract.
Lawful consideration and object (Section 23): Unlawful if: forbidden by law | defeats a law | fraudulent | injury to person or property of another | immoral or opposed to public policy; An agreement whose object or consideration is unlawful is void.
No consideration (Section 25): Agreement without consideration is void, except: (1) written, registered, natural love and affection between near relations; (2) promise to compensate for past voluntary act; (3) written, signed promise to pay a time-barred debt; In these three cases the agreement is a contract. Inadequate consideration alone does not make an agreement void if consent was free.
Other void agreements: Void: restraint of trade (s.27, to that extent) | unlawful in part (s.24) | uncertain (s.29) | impossible act (s.56); These come under 'expressly declared to be void'. Section 27 has an exception for sale of goodwill within reasonable local limits.
Writing and registration (Section 10, second part): Section 10 does not affect any law requiring writing, witnesses or registration; Oral contracts are valid unless some other law demands a form.

How to solve Nature and Essentials of a Valid Contract (Section 10) questions

Use the Section 10 checklist on any fact-based question. Go in order and stop when you find the defect.

1Identify the agreement: who promised what to whom.
2Test free consent. Look for coercion, fraud or misrepresentation. If found, the contract is voidable, not void.
3Test competency of the parties, using the facts given in the question.
4Test consideration. Is something given in return? If not, check the three exceptions in Section 25.
5Test lawfulness of consideration and object against the five heads of Section 23.
6Check whether any provision expressly declares the agreement void, such as uncertainty (s.29), restraint of trade (s.27) or an impossible act (s.56).
7Check whether another law requires writing, witnesses or registration.
8State the conclusion: valid contract, voidable contract or void agreement, with the reason.

Quickest way: Five-word scan for Section 10

When to use it: Use this in the OMR paper when a question gives a short scenario and four options.

Scan for the keywords: consent, competent, consideration, object, void.
Look for the one defect hidden in the facts, such as a gift without return, a promise to do something illegal, or vague terms.
Free consent defect means voidable. Lawful consideration, lawful object or express-void defect means void.
Eliminate options that call the agreement valid when a defect exists.
Remember inadequate consideration is not a defect by itself.

Common mistakes in Nature and Essentials of a Valid Contract (Section 10)

Treating agreement and contract as the same thing.
Everyday language uses both words loosely.
Fix: Use the line: a contract is an agreement enforceable by law. Every contract is an agreement, but not every agreement is a contract.
Calling an agreement made by fraud void instead of voidable.
Students link any defect to 'void'.
Fix: Under Section 19, lack of free consent through coercion, fraud or misrepresentation makes it voidable at the option of the affected party.
Saying an agreement is void because the consideration is inadequate.
Students assume the price must be fair.
Fix: Under Section 25, Explanation 2, an agreement is not void merely because consideration is inadequate if consent was freely given. The court may weigh inadequacy when judging free consent.
Saying every contract must be in writing.
Confusing legal rules with business practice.
Fix: Section 10 saves laws that require writing, witnesses or registration. Without such a law, an oral contract can be valid.
Forgetting that an agreement without consideration can sometimes be a contract.
Students memorise 'no consideration, no contract' as absolute.
Fix: Learn the three exceptions in Section 25: written and registered promise from natural love and affection between near relations, promise to compensate for past voluntary service, and written signed promise to pay a time-barred debt.
Confusing unlawful object with unlawful consideration.
Both are tested under Section 23.
Fix: Consideration is what each side gives in return. Object is the purpose of the agreement. Either being unlawful makes the agreement void, and Section 24 says even part unlawful voids it.

Worked examples

Example 1

Asha promises to give her friend Meera ₹5,000 as a birthday gift. There is no writing and Meera gives nothing in return. Can Meera enforce the promise? Choose: (a) Yes, it is a valid contract (b) No, it is a void agreement (c) Yes, it is a voidable contract (d) No, because Asha is not competent

Show the solution

Identify the agreement: a promise to pay ₹5,000 with nothing given in return.
There is no consideration.
Check Section 25 exceptions. It is not written and registered, and the parties are friends, not near relations.
It is not a promise to compensate for a past act and not a promise to pay a time-barred debt.
None of the exceptions applies, so the agreement is void under Section 25.

Answer: (b) No, it is a void agreement. Meera cannot enforce it.

Example 2

Rohan agrees to sell his shop to Imran for ₹20,00,000. Imran agrees to pay the price and to use the shop for illegal storage of banned goods. Is this a valid contract? Explain.

Show the solution

The parties agreed on sale and price, so there is an agreement with consideration.
Test the object. Using the shop for illegal storage of banned goods is an object forbidden by law.
Under Section 23, an agreement with an unlawful object is void.
Section 10 requires a lawful object, so the condition fails.
Section 24 also says that if any part of a single consideration for one or more objects is unlawful, the agreement is void.

Answer: It is not a valid contract. The agreement is void because its object is unlawful under Section 23.

Exam tips

In the OMR paper, learn the exact list in Section 10: free consent, competent parties, lawful consideration, lawful object, not expressly declared void.
Questions often hide one defect in the facts. Find it before reading the options.
Be clear on void versus voidable: lack of free consent gives voidable, unlawful object or consideration gives void.
Remember the second part of Section 10 on writing, witnesses and registration. It is a common one-line MCQ.
For a written answer, give the definition, list the essentials, then apply them to the facts in order.

Practice questions from Elements of Law of Contracts

Nature and Essentials of a Valid Contract (Section 10) in other exams

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

Nature and Essentials of a Valid Contract (Section 10): frequently asked questions

What does Section 10 of the Indian Contract Act 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 that requires writing, witnesses or registration.

What is the difference between an agreement and a contract?

An agreement is a set of promises between parties. A contract is an agreement that the law enforces. So every contract is an agreement, but not every agreement is a contract.

Must a contract be in writing to be valid?

Not in general. Section 10 does not require writing by itself. It only preserves other laws that require a contract to be in writing, in the presence of witnesses, or registered.

Is an agreement without consideration always void?

It is void as a general rule under Section 25. There are three exceptions: a written and registered promise from natural love and affection between near relations, a promise to compensate for a past voluntary act, and a written signed promise to pay a time-barred debt.