Preview

Essentials of a Valid Contract

Satisfactory Essays
Open Document
Open Document
496 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Essentials of a Valid Contract
ESSENTIAL ELEMENTS OF A VALID CONTRACT:
To be enforceable by law an agreement must possess the essential elements of a valid contract as laid down by Sec.10 of Contract Act in the following terms;
‘All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.’
Following are the conditions for validity of the contract in detail.
1. Offer and Acceptance:
There must be an agreement based on a lawful offer made by one party and a lawful acceptance of that offer from the other party. The adjective lawful implies that the offer and acceptance must satisfy the requirements of the Contract Act in relation thereto.
2. Legal Relationship: The parties must have intended their agreement to have legal consequences and legal obligations. Agreements of a social or domestic nature do not contemplate legal relations, and as such they do not give rise to a contract.
3. Lawful Consideration:
Consideration means something in return (quid pro quo). For a valid contract both parties must have provided consideration, i.e. each side must promise to give or do something for other. However, it must be legal, real, harmless and not immoral.
4. Competent Parties:
The parties to an agreement must be competent to contract. The contracting parties must be of the age of majority and of sound mind and must not be disqualified by any law to which they are subject. (Section 11)
5. Free Consent:
Free consent of all parties is another essential element. Consent means that the parties must have agreed upon same things in the same sense. Consent is said to be free if it is not obtained by coercion, undue influence, fraud, misrepresentation or mistake. (Section 14)
6. Lawful Object:
Object means ‘the purpose of entering into a contract’. For the formation of a valid contract it is also necessary that the parties to an agreement must agree for a

You May Also Find These Documents Helpful

  • Best Essays

    BUS 311 Outline

    • 511 Words
    • 3 Pages

    The section looks at the requirements for a contract to be legally binding. Five aspects namely, competent parties to form the contract, subject matter of the contract, lawful Consideration, mutual agreement /acceptance and…

    • 511 Words
    • 3 Pages
    Best Essays
  • Good Essays

    Gloria Smithson

    • 536 Words
    • 2 Pages

    A valid contract meets all the necessary fundamentals to establish a contract. A valid contract can be enforced by law. Below are the essential components:…

    • 536 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Contract Law Notes

    • 22630 Words
    • 91 Pages

    It is a legal enforceable agreement entered into by two or more different persons with legal capacity. The parties should have serious intention to create legally binding obligations. Their agreement needs to be within parities’ contractual capacity. Furthermore, parties should communicate such intention without vagueness each to the other and being of the same mind to the subject matter.…

    • 22630 Words
    • 91 Pages
    Good Essays
  • Good Essays

    Answer: The parties to do or not do a specific thing must base it on a mutual agreement. Parties who are competent to enter into a contract that will be enforceable against both parties must make it. The promise or obligation of each party must be supported by consideration. It must de for a lawful purpose the contract must not be illegal such as the unauthorized buying and selling of narcotics. The contract must meet certain formal requirements such as being in writing or under seal.…

    • 2514 Words
    • 11 Pages
    Good Essays
  • Good Essays

    To enter into a contract, a party must be legally competent. Parties that cannot generally enter into contracts include minors and persons adjudged to be insane. Contracts entered into with either of these types of parties may be void and unenforceable.…

    • 549 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Contract Analysis

    • 731 Words
    • 3 Pages

    6. Legality – A contract is only enforceable if the contract is legal. A contract can’t be for anything that is illegal such as assault, murder, or other illegal acts.…

    • 731 Words
    • 3 Pages
    Powerful Essays
  • Good Essays

    The third necessary element of a contract is consideration. Consideration is defined as something of…

    • 512 Words
    • 3 Pages
    Good Essays
  • Better Essays

    There are four elements to a valid contract, the first is called an agreement this is where an offer is made. An agreement is usually made between at least two parties. These parties can be a company and one person, two companies, or two people. The second is consideration this is where both parties consider to do or refrain from doing some form of lawful act. It is also the exchange of money between the two entities within the agreement for service or goods. As many know in the business world there are other methods of consideration. The third is lawful object this means that the parties must be legally capable of entering into a contract. Meaning the parties must be of legal age, have an understanding of what the details outlines within the contract are. The fourth is contractual capacity. Contractual capacity is where the…

    • 961 Words
    • 4 Pages
    Better Essays
  • Satisfactory Essays

    3. Both parties are receiving consideration or value from the agreement: This is most commonly money in exchange for a good or service, but there are other methods of consideration, especially in the business arena.…

    • 387 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    There are three main elements for the formation of a legally binding contract, intention, agreement and consideration. The requirement that requires discussion here is the existence of an agreement by the parties to enter into a legally binding contract.…

    • 1681 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    A contract is said to come into existence when acceptance of an offer has been communicated to the offerer by the offeree. An offer is an expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed, the "offeree".…

    • 507 Words
    • 3 Pages
    Good Essays
  • Good Essays

    elements of contract

    • 577 Words
    • 3 Pages

    Consideration- Consideration must be present when entering a contract, not prior. A contract without consideration is a bargain. It is something of value given by the promissor to the promisee in exchange for something of value. Normally the thing of value is a payment.…

    • 577 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Business Law Outcome 2

    • 1226 Words
    • 5 Pages

    * Legal obligations and rights must be made and all parties must agree to be legally bound to the agreement:…

    • 1226 Words
    • 5 Pages
    Good Essays
  • Best Essays

    Contract Law

    • 2777 Words
    • 12 Pages

    For an agreement to be legally enforceable there must be an offer by the offeror to be bound by certain terms. This offer can be in writing, orally or by conduct and made to an individual, group or even to the world at large. This offer must be followed by an unqualified acceptance communicated by the offeree to the offeror.…

    • 2777 Words
    • 12 Pages
    Best Essays
  • Good Essays

    Contracts

    • 7101 Words
    • 29 Pages

    a meeting of minds between 2 persons whereby one binds himself, with respect to the other, to give something or to render some service (ARTICLE 1305)…

    • 7101 Words
    • 29 Pages
    Good Essays

Related Topics