COMMERCIAL CONTRACTS TRANSACTION FORMATION, PERFORMANCE AND CHALLENGES

AUTHOR – ISHITA AGARWAL* & MR.ANUJ KUMAR SHARMA**

* STUDENT AT AMITY UNIVERSITY

** PROFESSOR AT AMITY UNIVERSITY

BEST CITATION – ISHITA AGARWAL & MR.ANUJ KUMAR SHARMA, COMMERCIAL CONTRACTS TRANSACTION FORMATION, PERFORMANCE AND CHALLENGES, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (3) OF 2026, PG. 992-1008, APIS – 3920 – 0001 & ISSN – 2583-2344.

ABSTRACT

Commercial contracts constitute the legal infrastructure through which market activity is organized, risk is distributed, and enforceable expectations are stabilized. While the foundational requirements of contract formation offer, acceptance, consideration, intention to create legal relations, capacity, and free consent remain doctrinally settled, contemporary commercial practice has significantly transformed the context in which these principles operate. The expansion of digital commerce, the prevalence of standardized documentation, the globalization of trade, and the increasing sophistication of risk allocation mechanisms have reshaped both transactional design and judicial interpretation.

This paper undertakes a doctrinal and analytical examination of commercial contract formation under the Indian Contract Act, 1872, situating it within comparative common law developments and relevant international instruments, particularly the United Nations Convention on Contracts for the International Sale of Goods (CISG). It evaluates whether classical formation doctrines retain conceptual adequacy in the face of technological innovation, complex commercial structuring, and asymmetrical bargaining dynamics. Particular attention is devoted to electronic contracting, standard form agreements, representations and warranties, limitation of liability clauses, and arbitration frameworks as mechanisms that extend and operationalize foundational principles.

Methodologically, the study adopts a doctrinal approach supplemented by comparative and contextual analysis of judicial decisions and statutory interpretation. It argues that while the structural core of contract formation remains intact, its application increasingly reflects pragmatic, relational, and efficiency-oriented considerations. Courts demonstrate a pronounced commitment to commercial certainty, yet simultaneously intervene where consent is vitiated or fairness is materially compromised the paper concludes that commercial contract law should not be understood as a static aggregation of formal requirements, but as an adaptive regulatory architecture that sustains economic development. Its continued legitimacy depends upon its capacity to preserve predictability while responding to digital transformation, transnational harmonization, and evolving standards of substantive fairness. In this dynamic interplay between certainty and flexibility lies the enduring relevance of commercial contract doctrine in India and beyond.

Keywords                                                                                                                                        

Commercial Contracts; Contract Formation; Indian Contract Act 1872; Offer and Acceptance; Consideration; Free Consent; Electronic Contracts; Standard Form Agreements; Risk Allocation; Arbitration Clauses; Comparative Contract Law; International Commercial Transactions; Digital Commerce; Contractual Fairness; Legal Certainty.