Parties who are both in good health should freely accept the terms of the agreement, i.e. without undue influence, coercion, coercion or misrepresentation of the facts. Both the nephew and aunt accept the terms of the contract without putting pressure on themselves and with the intention of fulfilling their obligations. What makes an agreement valid is the first thing to discuss. The process of entering into a valid agreement begins with the legal provisions of the Indian Contracts Act. Without a witness to the deal, the aunt could be out for $200 — and a decent relationship with her nephew. In a valid contract, one party makes an offer and the other party agrees. This is commonly referred to as the “meeting of chiefs” because both sides agree to these conditions. In our example, the aunt offers to lend money to her nephew on the condition that he repays it within a reasonable time. .