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Section 2(h) of the Contract Act, 1871 (“Contract Act”) states that an “…agreement enforceable by law is a contract”. Similarly, section 10 of the Contract Act stipulates that

 Section 2(h) of the Contract Act, 1871 (“Contract Act”) states that an “…agreement enforceable by law is a contract”. Similarly, section 10 of the Contract Act stipulates that “All agreements are contracts, if they are made by the free consent of the parties,competent to contract, for a lawful consideration with a lawful object, and not hereby expressly to be void.” Therefore, the basic elements required to be proved for a valid agreement to be legally enforceable are mutual consent, expressed by a valid offer and acceptance; adequate consideration; capacity; and for it to be subject to the laws of the jurisdiction. These may be determined by looking at the objective manifestations of the intent of the parties as gathered by their expressed words and deeds, as well as objective evidence establishing that the parties intended to be bound. An agreement may be oral or in writing. A written agreement is an instrument whereby parties perform the act of declaring their consent as to any act or thing to be done by some or all parties through the process of writing. Where the parties to an agreement intend not to be bound until their agreement is reduced to writing and signed, neither party is bound until the writing is executed. If the written agreement pertains to financial or future obligations, it is to be compulsorily attested by two men or one man and two women, as provided by Article 17(2) of the Qanun-e-Shahadat Order, 1984 (“QSO, 1984”) which is sine qua non for a valid agreement. Such written document should not be used as evidence until the attesting witnesses are called for the purpose of proving its execution in a manner enumerated in Article 79 of the QSO, 1984.

However, this situation must be distinguished from that in which the parties intend to bind themselves orally or by their conduct, but have the further intention of reducing their agreement to a writing after the oral agreement is made. In such case, the written agreement of the completed oral contract remains unaffected even if it is not signed by either party. The requirement of signing the agreement by the parties is to show their free consent and intention to be legally bound by their oral offer and acceptance. In circumstances where the agreement is reduced into writing and is not signed by either or one of the parties, it may still be valid and enforceable, however, its legal effect will be limited and the enforceability may be more difficult to establish in such case. It is, therefore, necessary that it must be pleaded in the pleadings and the requirements of a valid contract must be proved through cogent evidence by the party relying upon it.2 These factors will be considered by the courts in determining the intent of the parties and steps partially taken for giving effect to the agreement. Thus, if the courts are satisfied that the party relying upon an unsigned agreement has proved the necessary ingredients for its validity, it may be enforced in favour of the party claiming its performance.
Suit for specific performance/. C.A.102-L/2017
Said Rasool v. Maqbool Ahmed (deceased) through his L.Rs., etc
Mr. Justice Jamal Khan Mandokhail
17-05-2023





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