Meaning and Definition of Contract

To extract the meaning and definition of contract, we can take help from the authentic propositions made by great scholars, meanings given in the dictionary, and the precedent or decision made by the Apex court.

Generally, a contract is a promise and swearing made by one party to do something with another party. Contract is an outcome of the contracting parties about their liability, rights, and duty. In short, it is a promise between two contracting parties.

The definition and meaning of contract gives the exact nature of contract which helps largely to know it. Here are some definitions given below:

Definitions

“Contract means an agreement enforceable by law concluded between two or more persons for performing or not performing any work.” – Muluki Civil Code 2074, Sections 504(1)

“An agreement enforceable by law is a contract.” – Indian Contract Act 1872 Section 2 (h)

“A contract is an agreement creating and defining obligation between the two parties or more persons.” – Salmond

“An agreement between two or more persons which creates an obligation to do or not to do a particular thing.” – Black’s Law Dictionary

“A contract is a set of promises that the court will enforce.” – Section 1 of the American Restatement of Contract

“A contract is an agreement enforceable at law made between two or more persons, by which rights are acquired by one or more to acts or forbearance on the part of other or others.” – William Annson

“A contract is a promise or set of promises for the breach of which law provides a remedy.” – Frederic Pollack

“Contract is an agreement giving rise to obligations which are enforced or recognized by law.” – G.H. Treital

“Contract means an agreement between two or more parties especially one that is written and enforceable by law.” – American Heritage Dictionary

“A contract is a promise, or set promises, for breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty.” – Samual Williston

In this way, from the definitions mentioned above the meaning and definitions of contract is clear. Besides this Nepal’s Supreme Court and foreign Apex Court have also defined contracts. In the Nepalese context in the legal prosecution of the case of Tirtha Kumari Lama vs Ram Shankar Shrestha1 contract has been defined as, “Matching between proposal and assent which causes the parties to do something by meeting their mind.” Similarly, in the case of Thulikanchi Kamini vs Kancho Kami2 attempt has been made to define a contract.

Also Read Background & Scope of Contract.

In these cases, What is contract law? What are the prerequisites of a contract? The answers have been given. The British House of Lords had also defined contract in 1979 in the case of Gibson vs Manchester City Council as “to be a contract there should be a proposal and the assent of contracting parties.” Likewise, the American Illinois Court of Appeals had defined and founded the principle of the elements of contracts in 1976 in the case of Steinberg vs Chicago Medical School.

From the court’s verdicts and decisions, one can present the following meanings of contract:

1. A contract is an agreement; an agreement is a promise and a promise is an accepted proposal.
2. A contract is an agreement or promise between parties and a meeting of mind.
3. A contract creates mutual rights and legal obligations.
4. Agreement that can be enforceable by law.
5. In a contract, there is the need for the presence of at least two parties or more than that to perform the legal obligation created by it.
6. There must be a clear agreement between parties to do or not to do something.

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