Conditional Contract Indian Contract Act
Conditional Contract under the Indian Contract Act
Under the Indian Contract Act, a contract can be defined as a legally binding agreement voluntarily entered into by two or more parties. It is essential for the parties to a contract to understand the conditions that govern their agreement. In certain cases, contracts can be conditional, meaning that specific conditions need to be met before the contract can become binding.
What is a Conditional Contract?
A conditional contract is a contract that is dependent on the occurrence or non-occurrence of a specific event. In other words, before the contract can become effective or binding, certain conditions need to be met. This type of contract is commonly used in business transactions where the parties involved want to be certain of the outcome before committing to the agreement.
Requirements for a Valid Conditional Contract
To be valid, a conditional contract must meet the following conditions:
1. The condition must be specified: The contract should clearly mention the condition or event that must occur before the contract becomes binding. The condition should be unambiguous and specific.
2. The condition must be legal: The condition should not be unlawful or against public policy. If the condition is illegal, it will not be enforceable.
3. The condition must be possible: The condition must be capable of being fulfilled. If the condition is impossible to fulfill, the contract will not be enforceable.
4. The condition must not be vague: The condition should not be vague or uncertain. It should be clear and definite.
5. The condition must not be against the object of the contract: The condition should be consistent with the object of the contract. If the condition is against the object of the contract, the contract will not be enforceable.
Effect of Non-Fulfillment of a Condition
If the condition is not met or fulfilled, the contract becomes void. The parties are then discharged from their obligations under the contract. However, if the condition is fulfilled, the contract becomes binding, and the parties are required to fulfill their obligations under the contract.
A conditional contract is a useful tool for parties to enter into an agreement that is dependent on certain conditions to be met. It is essential for the parties to understand the requirements for a valid conditional contract and the consequences of non-fulfillment of the condition. With proper guidance, parties can enter into a legally binding agreement that protects their interests.