What is contract law?

Contracts are involved in many parts of our daily lives. For example, buying property, applying for a car loan, signing employment documents...

Contract law

Contracts are involved in many parts of our daily lives. For example, buying property, applying for a car loan, signing employment documents, and accepting terms and conditions when buying goods and services or using computer software.

Therefore, I will discuss contract law below.

What is contract law?

Article 2 (h) of the 1872 Contract Act, which is applicable in Bangladesh, states that a contract is a binding agreement.

When two or more people agree on something, that is, one person's proposal is accepted by the other person and there is a reward for support, a promise is made between them. If the elements described in section 10 are present in support of this pledge or agreement, a contract is formed between them and creates mutual obligation.


‘A’ offered to sell his cow to ‘B’ for five thousand Taka. B agrees. This consent creates a commitment or agreement between them, but does not create a legal obligation. Obligation is formed, if the following elements are present:

  • If both ‘A’ and ‘B’ have the ability to contract, i.e. if they are not minors or possess a sick mind or are unnatural or their eligibility has not been curtailed by any law;
  • Both parties express their views independently, meaning that no pressure, intimidation, deception, delusion or misrepresentation are involved;
  • The consideration of the contract becomes valid. In this case, offering the cow and paying its price is a reciprocal consideration which is undoubtedly valid. According to Article 23 of the Contract Act, the consideration is not prohibited by law, nor is it contrary to any provision of the customary law, nor is it harmful to the body or property of another, nor is it contrary to morality or public policy.
  • The purpose of such sale is not illegal;
  • This sale is not prohibited by any conventional law.
Therefore, it should be noted that all commitments do not fall within the scope of the contract. Pledges that are made in accordance with the provisions of the contract law are covered by the contract and the contract law. That is, the contract law indicates which pledges will get the status of a contract.

A similar definition is found in British Common Law. According to Salmond, a contract is one that creates and determines liability between the parties involved. According to Sir Frederick Pollock, every agreement and promise enforcible by law can be called a contract.

Anson describes in his contract in law book as follows: “A contract is an agreement established between two or more persons which can be enforced by law. As a result of which one or more persons acquire the right to prevent other person or persons from doing anything.”



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Money Gelt - The Blog of Law: What is contract law?
What is contract law?
Money Gelt - The Blog of Law
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