The Law of Contract is the most important branch of business law. It is relating to the business of commercial transactions. It has existed from the beginning of organized society. Like, safety of person and property depends upon the rules of criminal law, similarly, the security and stability of the business depends upon the law of contract.

The law of contract affects every one of us, because every one of us enters in to contract several times in a signal day. While purchasing in the market or a ride on a bus, taxi or drink a cup of tea in a hotel in all these and many other affairs of daily life are possible due to the law of contract. For this reason the study of the general principles of contract law is important and essential not only business person but for all of us.

A contract is an agreement enforceable by law. The law of contract is the foundation of the business. Every business activities are determined and guided by the agreement of the concerned parties. It is concerned with rights and obligations of the parties entering to any business or commercial activities. A law of contract is an important part of business law because the act of transaction is performed between two or more than two parties and relationship between them regulated by the law of contract.

1.Definition of Contract

 The term 'Contract' has been defined by the different scholars, statutes, dictionaries and judicial decisions. Some of them are given below:

Oxford Dictionary has been defined the term contract as "A written or spoken agreement intended to be enforceable by law".

According to Frederic Pollock; "Every agreement and promise enforceable at law is a contract."

John Salmond has been defined the term contract as "An agreement creating and defining obligations between the parties."

According to Section 2 (h) of Indian Contract Act, 1872; Contract is an agreement enforceable by law is a contract."

 According to Section 2(a) of Nepal Contract Act, 2056; Contract is an agreement between two or more than two persons to do or not to do something, which can be enforceable by law.

According to David M. Walker; An agreement, creating between two or more persons intended to create a legal obligations between them and to be legally enforceable, is called contract.

S.W. Anson defines contract as " A legally binding agreement between two or more persons by which rights are acquired by one or more to acts done or forbearance on the part of others."

The Supreme Court of Nepal has defined the term 'contact as agreement of two or more parties with conditions'- in the case of Vijaya kumar Basnet vs. Kathmandu Metropolitan et al (Nepal Kanoon Patrika 2059 p. 37.¹

Similarly the Supreme Court of Nepal has Stated 'Contract means meeting of mind between two or more parties to do or not to do something through offer and acceptance' in the case of Tirtha kumara vs. Ramashekhar shrestha. (Nepal Kanoon Patrika 2040 p. 298)²

Observing the above definitions we may come to a conclusion that a contract has;

• Two or more than two parties
• Offer and acceptance for to do or not to do something.
• An agreement to do or not to do any act on the ground of free consent.
• Exchange of promise by meeting of mind.
• Rights and liabilities are created reciprocally between the concerned parties.
• Enforceability of the liabilities by law.

In conclusion, we can say that Contract means an agreement made between two or more than two persons with free consent for to do or not to do something for a definite consideration and which can be enforceable by law.