Essentials of a valid contract

1 Offer and Acceptance

This is an agreement between two parties.

Valid offer by one

Valid acceptance by another

2 Legal Relationship

Parties in an agreement must create legal obligations. If one party does not fulfill his part of contract, he is to be held liable.

3 Consensus Ad Idem

Two parties must have an agreement on the subject matter of the contract.

Example: A has 2 cars, and intends to sell the red car of his, but B thinks it is the blue car, there is no consensus and no contract here.

4 Capacity of Parties.

Agreement is void ab initio in case of with minors, and unsound minds.
Contract is voidable in case of coercion and undue influence, or a person with usually sound mind on the basis of aggrieved party.

5 Free Consent

Consent is not free if made on the account of mistake in the minds of the parties or on the account of being made by some unfair means like coercion, fraud, misinterpretation or undue influence.

6 Lawful Consideration

All contracts must be supported by consideration.

7 Lawful Object

The subject matter of the contract must be lawful and legal.

Contracts that are void:
1. Illegal
2. Fraudulant
3. Involves injury to a person or his property.
4. If permitted would declare law unnecessary.
5. Restraint of public policy, such as marriage brokerage.
6. Immoral acts.

8 Not to be declared void

Agreements Declared void:

Restraint of Marriage
Restraint of Trade
Restraint of Legal Proceedings
Uncertain Agreement
Wagering
Minors Contract

9 Certainty and Possibility of performance

Certain and Possible act.

10 Legal Formalaties

Such as signatures and necessary documents.