We have answer of 12 Essential Elements of A Valid Contract. These elements are well discuss in this articles.
Example of Valid Contract
Ram agrees to lend Hari Rs. 1,000 to help him pay for groceries. They agree on the terms: Hari will pay back the loan within 2 weeks. This contract meets the essential elements of a valid contract: offer (Ram’s offer to lend Hari Rs. 1,000), acceptance (Hari’s agreement to borrow the money), consideration (the loan amount), and intention to create legal relations (the agreement made by both parties).
12 Essential Elements of A Valid Contract
Following are the 12 Essential Elements of A Valid Contract and their brief introductions.
1. Two Parties
There must be two parties in an agreement. To form an agreement there must be one party making the offer and party accepting it.
2. Offer and Acceptance
Out of the two parties, one has to express his willingness to another to do or not to do somthing i.e offer and other party has to give his acceptance to the terms of offer.
More Details of Offer and Acceptance: CLICK HERE
3. Intention to Create Legal Relationship
The parties when they agreed, they must be sincere about their promoise and their intention must be to create a legal relation.
4. Meeting of Minds
For an agreement the minds of the parties must be met upon some thing in the some sense. If there is no agreement, no contract arises between them and for an agreement, the minds of the parties must meet upon some thing in same sense.
5. Consideration
It is a price of promise that provides some benefits profits and rights to the promisor and imposes sime sort of determinent, loss or obligation to the promise. It means something in return or something for something.
6. Free Consent
The consent links the offer and acceptance or minds of the parties and creates an agreement between them. In the process the parties consent must be free. If the consent is not free, he can avoid contract.
7. Contractual Capacity of the Parties
If one or both of the parties of a contract have not contractual capacity the agreement except in some cases, contract can’t be valid contract.
8. Legality of Object and Consideration
The subject matter of agreement as well as the object and consideration must be lagal or lawful. The parties cannot enter into a contract for unlawful purpose activities/ Objectives.
9. Not expressly Declare Void
The transaction which are prohibited by law or aganist the public policy and marality are declared as void by contract law. In such case, the parties can’t enter into an agreement.
10. Possiblitity to Perform
The agreement must be such which can be perform in near future in real and practical life. So, the parties who are ready to perform that agreement in future are only valid contract.
11. Certainty and Clarity
The terms, conditions and language used in an agreemet must be certain and clear. The agreeemntmust give some meaning. It must be certain and CLear.
12. Legal Formalities
In some cases, the contract is to be stamped, registered in an authorized government office, written documents, contract made by words of mouth.
Hence, these are the 12 Essential Elements of A Valid Contract.
Other Important Links:
a. Meaning of Contract and and its types: CLICK HERE
b. BBS 3rd Year Business Law Notes: CLCIK HERE
c. BBS 3rd Year all Subject Notes: CLICK HERE
Frequently Asked Questions
a. What are the Essential Elements of A Valid Contract?
= Following are the Essential Elements of A Valid Contract
- Two parties
- Offer and Acceptance
- Intention to create Legal Relationship
- Meeting of Minds
- Consideration
- Free Consent
- Contractual Capacity of the parties
- Legality of object and Consideration
- Not Expressly Declare void
- Possibility to perform
- Certainty and Clarity
- Lagal Formalities
