Essential Elements of a Valid Contract
On analysing the contents of Sec. 10. It is revealed that the following are the essentials of a valid contract:-
1. Offer and acceptance.
2. Legal relationship.
3. Consensus-ad-idem.
4. Competency of parties.
5. Free consent.
6. Lawful consideration.
7. Lawful object.
8. Not declared to be void.
9. Certainty and possibility of performance.
10. Legal formalities.
1. Offer and acceptance:
In a contract there must be at least two parties one of them making the offer and the other accepting it. There must thus be an offer by one party and its acceptance by the other. The offer when accepted becomes agreement.
2. Legal relationship:
Parties to a contract must intend to constitute legal relationship. It arises when the parties know that if any one of them fails to fulfil his part of the promise, he would be liable for the failure of the contract.
If there is no intention to create legal relationship, there is no contract between parties. Agreements of a social or domestic nature which do not contemplate a legal relationship are not contracts.
3. Consensus-ad-idem:
The parties to an agreement must have the mutual consent i.e. they must agree upon the same thing and in the same sense. This means that there must be consensus ad idem (i.e. meeting of minds).
4. Competency of parties:
The parties to an agreement must be competent to contract. In other words, they must be capable of entering into a contract.
According to Sec 11 of the Act, “Every person is competent to contract who is of the age of majority according to the law to which he is subject to and who is of sound mind and is not disqualified from contracting by any law to which he is subject.”
Thus, according to Section 11, every person with the exception of the following is competent to enter into a contract:-
(i) A minor,
(ii) A person of unsound mind, and
(iii) A person expressly declared disqualified to enter into
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