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Essential Elements of Valid Contract

The document outlines the key elements required for a valid contract: 1) There must be an offer and acceptance between the parties without qualifications and it must be clear, definite, and final. 2) The parties must intend to create legal obligations - agreements that are merely social in nature are not considered contracts. 3) The parties must have the capacity to contract. 4) There must be genuine and free consent between the parties without mistakes, misrepresentations, or coercion. 5) The purpose and consideration of the contract must be lawful and not against public policy.

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932 views1 page

Essential Elements of Valid Contract

The document outlines the key elements required for a valid contract: 1) There must be an offer and acceptance between the parties without qualifications and it must be clear, definite, and final. 2) The parties must intend to create legal obligations - agreements that are merely social in nature are not considered contracts. 3) The parties must have the capacity to contract. 4) There must be genuine and free consent between the parties without mistakes, misrepresentations, or coercion. 5) The purpose and consideration of the contract must be lawful and not against public policy.

Uploaded by

rakshyak
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Offer and Acceptance


Basically, a contract unfolds when an offer by one party is accepted by the other party .
The accepted offer should be without any qualification and be definite. An offer needs to
be clear, definite, complete and final. It should be communicated to the offeree. A
proposal when accepted becomes a promise or agreement. The offer and acceptance
must be ‘consensus ad idem’ which means that both the parties must agree on the same
thing in the same sense i.e. identity of wills or uniformity of minds.

2. Intention to Create Legal Relationship


The intention of the parties to a contract must be to create a legal relationship between
them. Agreements of social nature, as they do not contemplate legal relationship, are not
contracts. For instance, if a father fails to give his daughter the promised pocket money,
the daughter cannot sue the father, because it was purely a domestic arrangement. Thus,
it is clear that all agreements, which do not result in legal relations, are not contracts.

3. Capacity to Contract
If an agreement is entered between parties who are competent enough to contract, then
the agreement becomes a contract.

4. Genuine and Free Consent


Free consent is another essential element of a valid contract. An agreement must have
been made by free consent of the parties. The contract would be void in case of mutual
mistakes. When consent is obtained by unfair means, the contract would be voidable.

5. Lawful Object
Objectives of an agreement should be lawful. It must not be illegal or immoral or
opposed to public policy. It is lawful unless it is forbidden by law. When the object of a
contract is not lawful, the contract is void.

6. Lawful Consideration
Something in return is Consideration. In every contract, agreement must be supported
by consideration. It must be lawful and real.

7. Certainty and Possibility of Performance


The agreements, in which the meaning is uncertain or if the agreement is not capable of
being made certain, it is deemed void. T&C of the contract should always be certain and
cannot be vague. Any contract that are uncertain are considered void. The terms of the
agreement must also be capable of performance and should not enforce impossible act.

8. Legal Formalities
Legal formalities if any required for particular agreement such as registration, writing,
they must be followed. Writing is essential in order to effect a sale, lease, mortgage, gift
of immovable property etc. Registration is required in such cases and legal formalities in
the relevant legislation should be strictly followed.

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