1. CONTRAST BETWEEN MISREPRESENTATION UNDER INDIAN LAW AND UAE LAW
The fundamentals of UAE law
The legal system of the United Arab Emirates is based on the Constitution of the United Arab
Emirates; this system is dual in nature as it has local and federal courts with a Supreme Court
Based at Abu Dhabi.
Unlike Britain and other countries where previous court judgments are regularly used as legal
precedents, the UAE does not depend that much on precedents, although sometimes the
judgements of higher courts can be applied by lower courts in similar cases
Where legislative provisions do not cover a specific issue, the court will decide in accordance with
Sharia law. Islamic jurisprudence is widely used in the construction and interpretation of the UAE
law.
When overseas investors in the UAE negotiate their contracts, the choice of governing law for
their contract can be a point of contention. Often, foreign parties want to choose a neutral and well-
established law, such as English law or New York law.
However, the respective bargaining powers of the parties may result in the foreign investor
agreeing to UAE law. In other scenarios, the UAE law itself may dictate that it should be used to
govern the contract, such as is required for Dubai government contracts under a Decree from 1988.
Certain other types of contracts are also required to be governed by UAE law in practice, including
UAE employment contracts and memoranda of association to establish a UAE company.
 This article focuses on a few key legal points to note under UAE contract law as set out in
the UAE Civil Code, particularly where they are different to English or other common law
jurisdictions;

2. 1. Beware of agreements to agree - the courts may enforce the missing details.
Article 141 of the UAE Civil Code provides that the parties to a contract must agree on the essential
elements of the obligation, but that they can leave matters of detail to be determined later. In this
circumstance, if a dispute arises, the judge will make a ruling on the missing terms in accordance
with the other provisions of the contract and the law.
However, it is clear from the Ministry of Justice official commentary that, for a UAE court to do
so, it must be clear that the parties intended to reach an agreement even if they fail themselves to
finalise all the details of the contract.
This departs from the usual position under English law, for example, under which agreements to
agree in the future are generally not capable of being enforced. Contracting parties may often
tactically choose to phrase a point of detail as an agreement to agree in the full knowledge that if
they do not agree in the future, it will not become a term of the contract.
It is also worth noting in this context that the implied obligation of performance in good faith may
mean that the courts will find bad faith (and therefore a breach of contract) if the parties fail to
agree in certain circumstances, such as one party failing to take reasonable efforts to reach an
agreement, or entering into parallel negotiations with a third party.
Therefore, under UAE contract law, parties may be well advised to expressly state that there is no
intention that the parties will be bound by Article 141, unless and until an agreement is entered in
writing between the parties.
2. Limitation clauses are acceptable but do not try to exclude liability for your own misdeeds.
Article 390 of the Civil Code states that contracting parties may fix in advance the amount of
compensation payable under terms of the contract, or in a subsequent agreement. It is clear from
the Article that the judge may overrule such a clause and, instead, award compensation in the

3. amount equal to the "harm" (loss). The parties are not entitled to contract out of this judicial right
to set the amount of compensation.
This provision focuses on a liquidated damages clause, not a clause which seeks to exclude or limit
heads of liability for certain types of loss. However, it is generally agreed that exclusion and
limitation clauses are acceptable under UAE contract law, provided that they do not attempt to
restrict liability for "unilateral acts", such as fraud and wilful misconduct. In other words, liability
for a deliberate act to breach a contract or inflict loss cannot be restricted under contract.
3. If your contract provides for payment of a sum of money in the future, you should apply the
exchange rate when payment is due.
If the consideration for the contract is money, its amount and the type must be specified without
any increase or decrease in the value of that money at the time that the payment is made (Article
204 of the Civil Code). This is interpreted to mean that, in relation to currency exchange rates, it
is important to be clear which rate applies.
It is also preferable that the applicable rate is the prevailing rate at the future date of payment (not
the date of the agreement).
This is so that the person due to receive payment gets the actual value of the sum in the foreign
currency when paid and avoids the argument that the person received more or less than was due to
him on the payment date due to the fixed rate applied as against currency movements.
4. A duty to act in good faith is implied into all UAE contracts.
The concept of "good faith" is well known to lawyers from civil law countries. It is, in effect, a
requirement not to use the terms of a contract to abuse the rights of the other contracting party, not
to cause unjustified damage to that other party and to act reasonably and moderately.

4. It is implied into UAE law contracts under Article 246: "a contract must be performed in
accordance with its contents, and in a manner consistent with the requirements of good faith".
Decisions of the Dubai Court of Cassation have ruled that a bad faith action of the other contracting
party may provide a cause of action for the other.
The effect of good faith on the terms of a contract is, therefore, wide reaching and may have a
significant impact on the outcome of a dispute.
Example:
M/s C. C. Engineering vsS.A.L. (Offshore); the contract for supplies of electrical fittings contained
the following clause:-
“If supplier fails to deliver to CCEP any or all of the goods within the time period(s) specified in
the item 3.1, the Purchaser shall without prejudice to its other remedies under the Purchase Order
deduct from the Purchase Order Price,
As liquidated damages, sum equivalent to (0.5%) of the delayed items for one week until actual
delivery or performance, up to maximum, deduction of (5%) of the delayed items. Once the
maximum is reached the Purchaser may consider the termination of the Purchase order for
supplier’s default. The liquidated damages applied shall be sole remedy towards delay.”
Article 390 of the UAE Federal Law, 1985 states that two contracting parties may fix in advance
the amount of damages either in the contract or in a subsequent agreement subject to the law
provisions.
And the court may amend such agreement in order to make the amount assessed equal to the
prejudice and any agreement contrary to this is void.
5. Only fraudulent behaviour constitutes misrepresentation.
Common law lawyers are used to the legal concept of misrepresentation forming an alternative
cause of action to breach of contract for parties who have been induced to enter into a contract by

5. statements made by one party which have subsequently be proven to be untrue (and which may
also be incorporated in the contract in the form of warranties, for example).
Misrepresentation is effective because its scope is wide and includes innocent and negligent
statements. It may also be fraudulent or reckless. It has a different basis for the calculation of
compensation to a claim for breach of contract and allows rescission of the contract.
"Entire agreement" clauses in English law contracts have, as one of their aims, the exclusion of
liability for misrepresentation in all its forms, other than fraudulent or reckless misrepresentation.
Under Article 185 of the Civil Code, misrepresentation occurs when one of the parties "deceives
the other by means of fraud, by word or deed, which leads the other to consent to what he would
not otherwise have consented to". Omission may also constitute misrepresentation where it is
deliberate. It does not include statements made innocently or negligently which are captured in the
English law concept.
Any reference to "misrepresentation" in a UAE law contract should be carefully considered
considering this key difference. This is particularly the case given that it is also not possible under
UAE law to exclude liability for fraud due to public policy considerations.
6. Termination provisions
Typically, contracts, under English/common law, allow one party to terminate a contract for
“without cause”. This basically allows one party to terminate if it no longer wishes to deal with
the other for any reason.
UAE law specifically sets out the circumstances under which a contract may be terminated. These
circumstances are limited. “Without cause” terminations are not allowed because they are contrary
to Sharia law.

6. Contract under Indian Law
Section 10 of the act mentions about what agreements are contracts. It states that all the agreements
are contracts if they are made;
1) by a free consent of parties (i.e. their free will) who are competent to contract,
2) for a lawful consideration and
3) for a lawful object, and
4) are not expressly declared to be void.
The section also mentions that nothing which is contained shall effect any law which is in force in
India, and is not hereby expressly repealed, by which any contract is required to be made in
writing or in the presence of witnesses, or any law relating to the registration of documents.
 As per Section 2(e) of the Contract Act, every promise or a set of promises which forms
the consideration for each other is an agreement. Thus, a promise can be said to be an
agreement.
 agreement= offer + acceptance
 Section 2(h) of the act defines contract as an agreement which is enforceable by law. A
contract can also be said to be an agreement, the object of which is to create a legal
obligation i.e. a duty enforceable by law.
 Contract = agreement + enforceability by law
Agreement is a wider term than contract wherein all contracts are agreements, but all agreements
are not contracts. The agreements which satisfy the conditions mentioned in Section 10 of the
Indian Contract Act, 1872 become contracts.

7.  Agreements are classified into two categories:
A) Agreements not enforceable by law
 the agreements which do not satisfy the essentials of a valid contract are not enforced by
law, hence cannot be considered as contracts. According to section 2(g) of the act such
agreements are said to be void. For instance, an agreement entered into by a minor is held
to be void. Section 24-30 of the act mentions about the agreements that are considered
void.
 Section 24- agreements are considered as void if considerations and objects are unlawful.
 Section 25- agreement without consideration is held as void unless the agreement is in
writing and registered or is a promise to compensate for something done or is a promise to
pay debt which is barred by limitation law.
 Section 26- agreement which is made in restraint of marriage is held as void.
 Section 27- agreements which are in restraint of trade are held as void.
 Section 28- agreement which is in restraint of legal proceedings is void.
 Section 29- uncertain agreements are held as void.
 Section 30- agreement by way of wager is held as void.
B) Agreements enforceable by law
 the agreements that satisfy the essentials of a valid contracts are enforceable by law.
 Thus, Sections 2(h) and 10 of the Act states about the essential elements of a valid contract.
If any one of those elements is not satisfied or is present in an agreement, it will affect the
validity and will not form a valid contract.
If we enter into a contract containing prescribed terms and conditions, which is a must under the
statute then that contract becomes a statutory contract. If a contract incorporates certain terms and
conditions in it, which are statutory then, the said contract to that extent is statutory.
In order to constitute a contract, the parties must consent to the agreement.

8.  Essential elements of a valid contract
 Offer and acceptance
 Consensus ad idem
 Legal relationship
 Capacity of parties
 Free Consent
 Lawful obligation
 Lawful object
 Not declared to be void
 Certainty and possibility of performance
 Legal formalities
 A contract can be evolved in the presence at least two parties one of them making the offer
and the other accepting it. Therefore, there must be an offer by one party and its acceptance
by the other party. The offer when is accepted becomes an agreement. The party which
makes the offer is known as offeror and the party to whom the offer is made is known as
offeree.
 Consensus ad idem
 The parties that are entering in the contract must have mutual consent i.e. they should be
agreeing upon the same thing in the same sense as it is. It means that there must exist
consensus ad idem (i.e. meeting of minds).
 Legal relationship
 Parties entering into a contract must intend to constitute a legal relationship. It arises only
when the parties know that if any one of them fails to fulfil his part of the promise, he
would be liable for the failure of the contract.

9.  If there exists no intention to create a legal relationship, there is no contract between parties.
Agreements of a social or domestic nature are not considered as contracts as they do not
contemplate or give rise to a legal relationship.
 Competency of parties
According to section 11 of the contract act The parties entering into a contract would be considered
competent if he;
 Has attained the age of majority,
 Is of sound mind,
 Is not disqualified to make a contract under a law to which he is subject.
However, the following persons are considered incompetent to contract, or only capable of
contracting to a particular extent. The persons who disqualified from entering into a contract due
to certain reasons may arise from their legal status, political status or corporate status.
o Alien Enemy: An agreement with an Alien Enemy is held to be void.
o Foreign Sovereign and Ambassadors: Foreign sovereigns and their representatives enjoy
certain amount of privileges and immunities in every country. They cannot enter into a
contract except through their agents residing in India.
o Convicts: A convict while he is undergoing imprisonment, cannot enter into a contract.
o Insolvents: An insolvent person is a person who is said to be unable to discharge or get off
his liabilities and therefore, has applied for being adjudged insolvent or if such proceedings
have been initiated by any one of his creditors.
o Company or Statutory bodies: A contract entered into by a corporate body or statutory body
will be valid only to the extent it is within its Memorandum of Association
 In the case of Mohori bibee v. Dharmodas Ghose,
Wherein Dharmodas Ghose being a minor mortgaged his property in favour of the
defendant Brahmo Dutt, who was a money lender to secure a loan. At the time of
transaction, the money lender, had the knowledge that the plaintiff was a minor. The court
held that the defendant’s contentions were rejected. Minor’s agreement was held void, and

10. it was held that the minor’s agreement was held void, and it was held that the minor could
not be asked to repay the loan taken by him.
 Free consent
According to section 13 of the act two or more persons are said to consent to a common thing
when they agree upon the same thing in the same sense. A consent is regarded as the most
fundamental component of a contract. The next section talks about free consent which is essential
for a valid contract. A consent is said to be free and valid when it is not caused by:
 Coercion
 Undue influence
 Fraud
 Misrepresentation
 Mistake
When consent is caused due to any of such factor, the agreement is voidable at the option of the
party whose consent was so caused. if, however the consent is done by mistake, the agreement is
considered to be void.
A consent of a person is affected by a number of factors, of which coercion is the most noticeable
one.
 Coercion is defined under Section 15 of the act as committing, or threatening to commit,
any act forbidden by the Indian Penal Code (45 of 1860) or the unlawful detaining, or
threatening to detain, any property, to the prejudice of any person whatever, with the
intention of causing any person to enter into an agreement. —Coercion means the
committing, or threatening to commit, any act which is forbidden by the Indian Penal Code
(45 of 1860) or the unlawful detaining, or threatening to detain, any property with the
intention of causing any person to enter into an agreement.”
 In the case of Ranganayakamma v. Alwar Setti the issue involved was that a widow was
not allowed to proceed with the cremation of her husband’s dead body until she adopted

11. the boy. The court held the adoption as invalid because her consent for adopting was
obtained by coercion.
 Threat to commit suicide
The act of committing suicide is prohibited under IPC, and therefore a threat to commit suicide
leads to coercion.
 The Madras High Court, in the case of Ammiraju v. Seshamma, where Amiraju threatened
to commit suicide to his wife and son if they did not release some properties in favour of
his brother. His wife and son executed the deed but later took the plea of coercion in the
court. The judges took the view that as threat to commit suicide is an offence punishable
under Indian Penal Code, it commits to coercion.
 Effect of coercion in a contract
In cases where a contract is exercised under force by one party, the party which receives any benefit
due to it, must restore it back. If the aggrieved party suffers from any loss, he can recover it from
the other party of the contract.
 Section 16 of the act mentions about undue influence wherein a contract is said to be
induced by ‘undue influence’ where the relations subsisting between the parties are such
that one of the party stands in a by which he can dominate the will of the other party and
uses that position to obtain an unfair advantage over the other.
 Presumption of undue influence in Unconscionable Bargains
In the cases of unconscionable bargain in between the parties on an unequal footing, the law raises
a presumption of undue influence. When a person is found to be in a position by which he can
dominate the will of the other, or the transaction appears to be affected due to dominance, the
burden of proof that no undue influence was exercised in the transaction lies on the party who is
in a position to dominate the will of the other.

12. In such cases, it is for the dominant party to rebut the presumption of undue influence exercised
by the law. If a party has got any gain at the cost of the other party, he is required to prove that
this advantage had not been gained by undue influence.
 In the case of Diala Ram v. Sarga(1927) the defendant was already indebted to the
plaintiff, who was a village money lender. He again took a fresh loan from the plaintiff and
then executed a bond, wherein he agreed to pay some interest. The court held that the
contract was unconscionable and, therefore, the burden of proof was on the plaintiff to
show that there was no undue influence in this case.
 Contracts with Pardanashin Woman
A pardanashin woman is one who observes complete seclusion i.e., who does not come in contact
with people other than her family members. Law provides a special protection to pardanashin
woman on the ground of their being ignorant so far as the worldly knowledge goes. A contract
done with a pardanashin woman is usually presumed to have been induced by undue influence.
The burden of proving that no undue influence was used lies on the other party. The other party
will have to prove that;
(i) the terms of the contract were fully explained to her,
(ii) she understood the implications,
(iii) free independent advice was available to her, and
(iv) she freely consented to the contract. This protection is available only to a woman who observes
complete parda. Some degree of parda or seclusion is not sufficient to entitle her to get special
protection.
 Section 17 mentions fraud as any act which is done by a party to a contract with the
intention of deceiving another party or to induce him to enter into a contract. It is
considered as a deception in order to gain by another’s loss.

13.  Misrepresentation under section 18 includes:-
(1) The positive assertion, in a manner not warranted by the information of the person making it,
of that which is not true, though he believes it to be true
(2) Any breach of duty which, without an intent to deceive, gains an advantage to the person
committing it, or anyone claiming under him; by misleading another to his prejudice, or to the
prejudice of any one claiming under him;
(3) Causing, however innocently, a party to an agreement, to make a mistake as to the substance
of the thing which is subject of the agreement.
 Consent of partners in a partnership firm
The formation of a partnership requires few basic formalities, such as a written agreement or
registration with an agency. All parties that are considered partners must consent to be such. The
consent given by a partner may be express, such as signing a written partnership agreement, or it
can be implied by the conduct of the parties. Parties do not specifically need to agree to form a
‘partnership’, rather their agreement or conduct must be in such a way that they agree to run a
business for profit. Even if the parties agree that their business will not be labeled a partnership,
the business may be found to be one if it meets the condition of a partnership firm.
 Consent of parties in an antenuptial agreement
An antenuptial agreement, also called a prenuptial contract is a contract entered into by the parties
prior to marriage, civil union, or by the people intending to marry or contract with each other. The
content of a prenuptial agreement varies widely, but commonly it includes provisions for division
of property and spousal support in the event of divorce or dissolution of marriage. It may also
include terms relating to the forfeiture of assets as a result of divorce on the grounds of adultery.
In India, prenuptial agreements are neither legal nor valid under the marriage laws because they
do not consider marriage as a contract but in Goa it is legally enforceable under Portuguese Civil
Code, 1867. A marriage in India is treated as a religious bond between both the husband and the
wife and prenuptial agreements finds no social acceptance in the country. However, these
agreements are governed by the Indian Contract Act and have as much sanctity as any other
contract, either oral or written.

14. In cases involving the enforcement of a prenuptial contract at divorce, usually it is found that a
husband presents a written prenuptial contract before his wife-to-be for the first time a few days
before the wedding or sometimes even on the day of the wedding and gives her an ultimatum to
sign the contract or else he won’t marry her. At the time of divorce, the wife’s attorney portrays
the husband’s ultimatum as coercion. But if seen technically, it is not coercion as the husband is
not legally bound to marry and the husband did not create the wife’s need to marry him. The
ultimatum can simply be considered as a condition precedent to the marriage.
 Lawful consideration and lawful object
According to section 23 of the Indian Contract Act, the following considerations and objects are
not considered as lawful:
 If it is forbidden by law,
 If it is against the provisions of other law,
 If it is fraudulent,
 If it damages somebody’s person or property,
 If it is in the opinion of court, immoral or against public policy.
 Thus, any contract which incorporates such unlawful provisions are not considered as a
valid contract.
 Certainty and possibility of performance
The terms of the contract should be certain and not vague. If by any way it is not possible to
ascertain the meaning of the agreement, it cannot be enforceable by law. An agreement to do any
impossible act can never be enforced. For example, agreement to bring stars from the sky cannot
be considered as a valid contract as it is an impossible act.
 Enforceability of oral agreements
If an oral agreement contains the condition of a valid agreement, it will be considered as a contract.
In the case of Sheela Gehlot v. Sonu Kochar & Ors Delhi High Court observed that oral
agreements are valid and enforceable and there could be no dispute about it, unless there is

15. anything which needs to be written. Further as in a contract, there has to be some proposal and
acceptance necessarily. The validity of an oral agreement cannot be questioned. A written
agreement is considered important because an oral agreement cannot be produced as an evidence
before the court. The burden of proving the oral agreement lies upon the party who claims to
consider such agreement in existence.
 In the famous case of Food Corporation of India v. Vikas Majdoor Kamdar Sahkari Mandli
ltd, the Apex court said that if an oral agreement is pleaded before the court but is not
proved, the person will be entitled to compensation under Section 70 of the act as Principle
of ‘quantum meruit’. This principle means when the work is done beyond the contract and
the benefit of the work has been availed of by the defendant.

16. Valid Offer under Indian Contract Act, 1872
 Following are the essential elements of a valid offer:
1. The offer must be communicated to the other party: The offer is completed only when it has
been communicated to the offeree. Until the offer is communicated, it cannot be accepted.
Thus, an offer accepted without its knowledge does not confer any legal rights on the acceptor.
 Example 2.1: A's nephew had absconded from his home. He sent his servant to trace his
missing nephew. When the servant had left, A then announced that anybody who
discovered the missing boy would be given the reward of Rs. 500. The servant discovered
the missing boy without knowing the reward. When the servant came to know about the
reward, he brought an action against A to recover the same. But his action failed. It was
held that the servant was not entitled to the reward because he did not know about the offer
when he discovered the missing boy.
2. The offer must be made with a view to obtain the consent of the offeree: When a person is
making an offer it means that he is making it with a view to obtain the consent of the offeree.
As soon as the offeree accepts it, the offeror is bound by it.
3. The offer must have its terms definite and clear: The terms of an offer must be definite,
clear and certain. If the terms of the offer are vague and uncertain, no contract will come into
existence.
 Example 2.2: A offered to sell to B ‘a hundred tonnes of oil’. The offer is uncertain as
there is nothing to show what kind of oil is intended to be sold.
4. The offer must be capable of creating legal relationship: An offer must be such that when
accepted it will result in a valid contract. A mere social invitation cannot be regarded as an
offer, because if such an invitation is accepted it will not give rise to any legal relationship.

17.  Example 2.3: A invited B to a dinner and B accepted the invitation. It is a mere social
invitation. And A will not be liable if he fails to provide dinner to B.
5. The offer must express the final willingness of the offeror: The terms of the offer should be
such that they contain final willingness of the offeror. Sometimes, a party does not express his
final willingness but proposes certain terms on which he is willing to negotiate. In such cases,
he is not making an offer because he is not expressing his final willingness to enter into a
contract.
Valid offer under the UAE Civil Code
 Article 141 of the UAE Civil Code provides that the parties to a contract must agree on the
essential elements of the obligation, but that they can leave matters of detail to be
determined later. In this circumstance, if a dispute arises, the judge will make a ruling on
the missing terms in accordance with the other provisions of the contract and the law.
 However, it is clear from the Ministry of Justice official commentary that, for a UAE court
to do so, it must be clear that the parties intended to reach an agreement even if they fail
themselves to finalise all the details of the contract.
 This departs from the usual position under English law, for example, under which
agreements to agree in the future are generally not capable of being enforced. Contracting
parties may often tactically choose to phrase a point of detail as an agreement to agree in
the full knowledge that if they do not agree in the future, it will not become a term of the
contract.
 It is also worth noting in this context that the implied obligation of performance in good
faith may mean that the courts will find bad faith (and therefore a breach of contract) if the

18. parties fail to agree in certain circumstances, such as one party failing to take reasonable
efforts to reach an agreement, or entering into parallel negotiations with a third party.
 Therefore, under UAE contract law, parties may be well advised to expressly state that
there is no intention that the parties will be bound by Article 141, unless and until an
agreement is entered in writing between the parties.
 In the case handled by us at OCS on the Cityland real estate development contract, I was
able to quote and change the draft proposed by Cityland real estate development.
Section 1(a) of the contract stated the list of governing laws. As Article 141 of the UAE Civil Code
allows for matters of detail to be decided at a later date, we specifically ensured to include a legally
permitted and binding clause that states,
1“ OCS United Service Emirates L.L.C states that it has no intention for it and the counterparty to
be bound by Article 141 of the UAE Civil Code, and both parties agree to take keen care to ensure
that all matters of detail will be specifically and individually discussed and finalised with each
party”.
*The above stated case and its work is annexed to this document as ‘ANNEXURE 1 (CITYLAND
MALL)
CONCLUSION
Unlike the Indian Law, the UAE Civil Code includes a provision for leaving offers in an agreement
as vague as possible; according to the convenience of the parties.
This in turn could and will definitely lead to various loopholes in the legal system of the nation, as
persons could be willfully strayed off of their understanding of various elements that bring together
the functioning of a bonafide agreement.
1 (Article141 UAE Civil Code, 2019)

19. Even though the United Arab Emirates is considered to be one of the safest and cleanest states
with respect to crime, there are still certain changes that can and should be brought into its system
to help protect all persons innocently involved in the establishment and working of any business
transaction.
A contract is considered as a legally binding agreement or a relationship that exists between two
or more persons to do or abstain from doing an act, which the law will enforce. If a contract needs
to be formed an offer must be backed by acceptance of which there must be some consideration.
Both parties to a contract must intend to create some legal relation upon each other of which the
party if fails to fulfill the conditions of the contract can be punished under law. Social contracts or
agreements between families do not enforce the agreements and do not intend to create any legal
relation, therefore cannot be considered as a valid contract.
An agreement is a form of cross reference between different parties which may be oral, written
and lies upon the honor of the parties for its fulfillment rather than being in any way enforceable.
All contracts are agreements because there essentially should be a mutual understanding between
the parties for a contract to be formed.
The parties should agree and adhere to the offer of the agreement. In the cases of an invitation to
an offer a contract is formed only when the offer is accepted by the other party and the party giving
the offer has knowledge of the acceptance, wherein all the terms of the offer is accepted. The most
essential part of a valid contract is a lawful agreement, as illegal contracts have no valid status i.e.,
they are considered as void in the eyes of law.
Therefore, it can be said that all agreements are not contracts, the agreements which are framed
under the law of the contract, can be treated as valid contracts. Mostly the terms ‘contract’ and
‘agreements’ are used interchangeably, but they are not precisely the same thing. Black’s law
dictionary considers an agreement as “a mutual understanding between parties about their relative
rights and responsibilities.” It defines a contract as “An agreement between parties creating
obligation that are enforceable by the law.”
Therefore, coming in a mutual agreement with someone, put it in writing, but if it doesn’t satisfy
the requirements of an enforceable contract, it cannot be enforced by law. The agreement must be
supported by consideration from both sides. Each party entering into the agreement must give or

20. promise to give something and receive something or a promise in return. Consideration is the price
for which the promise of the other is sought.
However, this price need not necessarily be in terms of money. In cases where promise is not
supported by consideration, the promise will by nudum pactum (a bare promise), which is not
enforceable at law. The object of the agreement must be lawful and not one which the law
disapproves.
REFERENCES
1) awards and recognition. (n.d.). Retrieved from ocs.com/ae: https://www.ocs.com/ae/about-ocs/awards-
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2) Indian Kanoon.(n.d.). Retrieved from 3) https://indiankanoon.org/
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