As a result of increasing complexities of business environment, innumerable contracts are entered into by the parties in the usual course of carrying on their business. Contract is the most usual method of defining the give and take rights and duties in a business transaction. This branch of Private law is different from other branches of law in a very important respect. It does not prescribe so many rights and duties, which the law will protect or enforce: it contains a number of limiting principles subject to which the parties may create rights and duties for themselves, In a sense parties to a contract are the makers of law for themselves. They can frame any rules they desire to the subject matter of their agreements, and law takes cognizance of their decision unless they are not legally prohibited.
The law relating to contracts is contained in the Indian Contract Act, 1872. This module contains the general principles of the Law of Contracts. In broadest prospect a contract is an exchange of promises by two or more persons that is an agreement creating an obligation to do or to refrain from doing a particular act, which is enforced by law. All agreements are not studied under the Indian Contract Act, 1872, as some of those are not contracts. Only those agreements, which are enforceable by law, are contracts. This unit refers to the essentials of a legally enforceable agreement or contract. It sets out rules for the offer and acceptance and revocation thereof. It states the circumstances when an agreement is voidable or enforceable by one party only, and when the agreements are void, i.e. not enforceable at all.