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
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