Lawful consideration
The third essential element of a valid contract is the presence of ‘consideration’. Consideration has been defined as the price paid by one party for…
Articles by MbaNotesWorld
Capacity of parties
The parties to an agreement must be competent to contract. But the question that arises now isthat what parties are competent and what are not….
Free consent
Free consent of all the parties to an agreement is another essential element. This concept hastwo aspects.(1) consent should be made and(2) it should be…
Lawful object
For the formation of a valid contract it is also necessary that the parties to an agreement must agree for a lawful object. The object…
Writing and registration
According to the Indian contract Act, a contract to be valid, must be in writing and registered. For example, it requires that an agreement to…
Certainty
Section 29 of the contract Act provides that “Agreements, the meaning of which is not certain or capable of being made certain, are void.” In…
Possibility of performance
Yet another essential feature of a valid contract is that it must be capable of performance. Section 56 lays down that “An agreement to do…
Not expressly declared void
The agreement must not have been expressly declared to be void under the Act. Sections 24-30 specify certain types of agreements that have been expressly…
Why does hedging reduce risk?
Hedging is the balancing of a risky position with an equal and opposite risky position. Effectively, hedging creates a portfolio of risky positions in which…
What is the difference between hedging across the balance sheet and hedging individual cash flows?
The difference is in which risky positions are balanced out. Hedging across the balance sheet matches assets and liabilities by their maturities to ensure that…