10 Essential Elements of a Valid Contract- EASY LEGAL MAN

 Definition of Contract

Section 2(h) of the Indian Contract Act provides that. "An Agreement enforceable by law is a contract. Therefore in a contract there must be (1) an agreement and (2) the agreement must be enforceable by law.

An agreement comes into existence whenever one or more persons promise to one or others, to do or not to do something, Every promise and every set of promises, forming the consideration for each other, is an agreement-Sec. 2(e). Some agreements cannot be enforced through the courts of law, e.g., an agreement to play cards or go to a cinema. An agreement, which can be enforced through the courts of law, is called a contract.

The Essential Elements of a Contract

An agreement becomes enforceable by law when it fulfils certain conditions. These conditions, which may be called the Essential Elements of a Contract, are explained below.

1. Offer and Acceptance: There must be a lawful offer by one party and a lawful acceptance of the offer by the other party or parties. 

2. Intention to create Legal Relationship : There must be an intention (among the parties) that the agreement shall result in or create legal relations. 

3. Lawful Consideration: Subject to certain exceptions, an agreement is legally enforceable only when each of the parties to it gives something and gets something. An agreement to do something for nothing is usually not enforceable by law. The something given or obtained is called consideration.

4. Capacity of Parties : The parties to an agreement must be legally capable of entering into an agreement, otherwise it cannot be enforced by a court of law. Want of capacity arises from  minority, lunacy, idiocy, drunkenness, and similar other factors. If any of the parties to the agreement suffers from any such disability, the agreement is not enforceable by law, except in some special cases. 

5. Free Consent: In order to be enforceable, an agreement must be based on the free consent of all the parties. There is absence of genuine consent if the agreement is induced by coercion, undue influence, mistake,  misrepresentation, and fraud. A person guilty of coercion, undue influence etc. cannot enforce the agreement. 

6 Legality of the Object : The object for which the agreement has been entered into must not be illegal, or immoral or opposed to public policy. 

7. Certainty: The agreement must not be vague. It must be possible to ascertain the meaning of the agreement, for otherwise it cannot be enforced. 

8. Possibility of Performance: The agreement must be capable of being performed. A promise to do an impossible thing cannot be enforced. 

9. Void Agreements : An agreement so made must not have been expressly declared to be void. Under Indian Contract Act there are five categories of agreements which are expressly declared to be void. They are:

1. Agreement in restraint to marriage. (Sec. 26)

2. Agreement in restraint of trade. (Sec. 27)

3. Agreement in restraint of proceedings. (Sec. 28) 

4. Agreements having uncertain meaning. (Sec. 29)

5. Wagering agreement. (Sec. 30)

10. Writing. Registration and Legal Formalities : An oral contract is a perfectly good contract, except in those cases where writing and/or registration is required by some statute. In India writing is required in cases of lease, gift, sale and mortgage of immovable property: negotiable instruments; memorandum and articles of association of a company etc.

Conclusion

The elements mentioned above must all be present. If any one of them is absent, the agreement does not become a contract! An agreement which fulfils all the essential elements is enforce able by law and is called a contract.