Contract Law Basics for Law Entrance Exams

Written and reviewed by Shubham Jain, BA LL.B., LL.M. · UILS, Panjab University alumnus · founder with 15+ years of teaching · Jury Law Academy, founded in 2016.

Sep 20, 2026

Quick answer: A contract needs offer, acceptance, lawful consideration, competent parties, free consent, a lawful object and no express declaration of voidness. Law entrance questions usually test whether one of these elements is missing in the given facts.

The elements

  1. Offer — a clear proposal made with intention to be bound.
  2. Acceptance — absolute and unqualified, communicated to the offeror.
  3. Consideration — something in return, lawful and real.
  4. Capacity — parties of age, sound mind and not disqualified.
  5. Free consent — no coercion, undue influence, fraud, misrepresentation or mistake.
  6. Lawful object — not illegal, immoral or opposed to public policy.

Distinctions that questions exploit

  • Offer vs invitation to offer — a shop display or advertisement is normally an invitation.
  • Void vs voidable — void has no legal effect; voidable is valid until the affected party rescinds.
  • Coercion vs undue influence — force or threat versus abuse of a dominant position.
  • Fraud vs misrepresentation — intent to deceive versus an innocent false statement.

Breach and remedies

When a party fails to perform, remedies include damages, specific performance where damages are inadequate, injunction to restrain a breach, and restitution. Compensation generally covers losses that naturally arise from the breach or were in contemplation of the parties.

How this is tested

A principle is given, sometimes altered slightly, followed by facts. Break the principle into elements and check the facts against each. Do not import remembered rules that the passage did not state.

Verify the statutory text

Authentic statutory text is available on the official India Code repository.

Related reading

Frequently Asked Questions

What makes an agreement a contract?

An agreement enforceable by law — requiring offer, acceptance, lawful consideration, competent parties, free consent and a lawful object.

Is an advertisement an offer?

Usually it is an invitation to offer rather than an offer, unless it is a clear promise capable of acceptance by performance.

Can a minor enter a contract?

An agreement with a minor is generally void, though certain protections and exceptions apply.

What is consideration?

Something given in return for a promise. Without it, an agreement is generally not enforceable, subject to recognised exceptions.