Essentials of a Valid Contract You have learnt that an agreement enforceable through law is a

contract. An agreement in order to be enforceable necessity has sure essential elements. Just as to
Section 10 - All agreements are contracts if they are made through the free consent of the parties
competent to contract, for a lawful consideration and with a lawful substance, and are not hereby
expressly declared to be void. Therefore, an agreement becomes a valid contract if it has the
following elements. Proper offer and its proper acceptance Intention to make legal connection Free
consent Capability of parties to contract Lawful consideration Lawful substance Agreement not
expressly declared void Certainty of meaning Possibility of performance Legal formalities Let us now
talk about these essential elements one through one. Proper offer and proper acceptance: In order
to make a valid contract it is necessary that there necessity be at least two parties, one creation the
offer and the other accepting it. The law has prescribed sure rules for creation the offer and its
acceptance that necessity be satisfied while entering into an agreement. For instance, the offer
necessity is definite and duly communicated to the other party. Likewise, the acceptance necessity
be unconditional and communicated to the offered in the prescribe mode, and so on. Unless such
circumstances with regard to the offer and the acceptance are satisfied the agreement does not
become enforceable. Intention to make legal connection: There necessity is an intention in the
middle of the parties to make a legal connection, If an agreement is not capable of creating a legal
obligation it is not a contract. In case of social or domestic agreements, usually there is no intention
to make legal connection. For instance, in an invitation to dinner there is no intention to make legal
connection and so, is not a contract. Likewise, sure agreements flanked by husband and wife do not
become contracts because there is no intention to make legal connection. This point can well be
illustrated through the well-known case of Balfour v. Balfour. Mr. Balfour had promised to pay £ 30
per month to his wife livelihood in England when she could not accompany him to Caulon where he
was employed. Mr. Balfour failed to pay the promised amount. Mrs. Balfour filed a suit against her
husband for breach of this agreement, It was held that she could not recover the amount as it was a
social agreement and the parties never planned to make any legal dealings. In commercial. or
business transactions the usual presumption is that the parties intend to make legal dealings.
Though, this presumption may' be negative through express conditions to the contrary. The case of
Rose & Frank Co. v. Crompton Brothers is relevant here. In this case there was an agreement flanked
by Rose & Frank Company and Crompton Brothers Ltd. whereby the former was appointed as selling
mediators in North America. One of the clauses in the agreement read, "This agreement is not
entered into as a formal or legal agreement and shall not be subject to legal jurisdiction in the law
courts." It was held, that this agreement was not a legally binding contract as there was no intention
to make legal dealings. You necessity note that whether intention to make legal connection exists in
an agreement or not is a matter for the court to decide which may look at the conditions and
circumstances of the agreement and the circumstances under which the agreement was made Free
consent: For a contract to be valid, it is essential that there necessity is free and genuine consent of
the parties to the contract. They necessity have made the contract of their own free will and not
under any fear or pressure. Just as to Section 14, consent is said to be free when it is not caused
through (i) coercion,' undue power, (iii) fraud, (iv) misrepresentation, or (v) mistake. In case the
consent is obtained through any of the first four factors, the contract would be voidable at the option
of the aggrieved party. But if the agreement is induced through mutual mistake which is material to
the agreement, it would be void. Capability of parties: The parties to an agreement necessity be
competent to contract i.e., they necessity be capable of entering into a contract. If any party to the
contract is not competent to contract, the contract is not valid. Now the question arises as to who
are competent to contract? Answer to this question is provided through Section II of the Act which
says that every person is competent to contract who is of the age of majority just as to the law to
which he is subject and who is of sound mind, and is not disqualified from contracting through any
law to which he is subject. From this section you will notice that in order to be competent to enter
into a contract, the person should be a major (adult), should be of sound mind and he necessity not
be declared disqualified from contracting through any law to which he is subject. Therefore, the flaw
in capability may be due to minority, lunacy, idiocy, etc. If a party to a contract suffers from any of
these flaws, the agreement, with a few exceptions, is not enforceable at law. Lawful consideration:
An agreement necessity is supported through consideration. Consideration means something in
return. It is also defined as the price paid through one party to buy the promise of the other. Though,
this price need not always be in conditions of money. For instance, A agrees to sell his book to B for
Rs. 20. Here the consideration for A is Rs. 20, and for B it is the book. The consideration may be an
act (doing something) or forbearance (not doing something) or a promise to do or not to do
something, The consideration may be past, present or future, consideration necessity be real i.e., it
necessity have some value in the eyes of law. Though, the consideration need not be adequate. For
instance, A sells his car worth Rs. 50,000 to B for Rs. 10,000 only. This is a valid promise provided the
consent of A is free. For a contract to be valid, the consideration should also be lawful. The
consideration is measured lawful unless it is forbidden through law, or is fraudulent, or involves or
implies injury to the person or property of another; or is immoral, or is opposed to public policy.
Lawful substance: The substance of an agreement necessity is lawful. An agreement made for any act
which is prohibited through law will not be valid. For instance, if A rents out a home for use as a
gambling den, the agreement is void because the substance of the agreement is unlawful. The
agreement shall be void; Therefore, the consideration as well as the substance, of the agreement
should be lawful. Agreement not expressly declared void: The agreement necessity not have been
expressly declared void under Contract Act. Sections 24 to 30 specify sure kinds of agreements which
have been expressly declared void. They are agreement in restraint of marriage, agreement in
restraint of legal proceedings, agreement in restraint of deal, and agreement through method of
wager. For instance, A agreed to pay Rs. 1,000 to B if he (B) does not marry throughout his life. B
promised not to marry at all. This agreement shall not be valid because it is in restraint of marriage
which has been expressly declared void under Section 26. You should note that if an agreement
possesses all other essential elements of a valid contract but is belongs to the category of such
agreements that have been expressly declared void through the Contract Act, no power on earth can
create it a valid contract. Certainty of meaning: Section 29 of the Contract Act gives that Agreements,
the meaning of which is not sure or capable of being made sure, are void. Therefore to create a valid
contract it is absolutely essential that its conditions necessity be clear and not vague or uncertain.
For instance, A agreed to sell 100 tones of oil to B. Here it is not clear what type of oil is planned to
be sold. So, this agreement is not valid on the ground of uncertainty. If, though, the meaning of the
agreement could be made sure from the circumstances of the case, it will be treated as a valid
contract. In the instance, if we know that A and B are dealers in mustard oil only, and then the
agreement shall be enforceable because the meaning of the agreement could be easily ascertained
from the circumstances of the case. Possibility of performance: The conditions of the agreement
necessity also are such as are capable of performance. An agreement to do an act impossible in itself
is void. (Section 56.) If the act is impossible of performance, physically or legally, the agreement
cannot be enforced through law. The reasoning is very easy. We create an agreement with a view to
perform it and if the performance is not possible, what is the fun of creation such agreements? For
instance, A promises to B that he will enclose some region flanked by two parallel rows or that he will
run at a speed of 200 kms. per hour or that he will bring gold from the sun. All these acts are such
which are impossible of performance and so the agreement is not treated as valid. Legal formalities:
You have learnt that an oral agreement is as good as is a written agreement. The Contract Act does
not require that a contract necessity be in writing to be valid. But, in some cases the Act has
specified that the agreement necessity be made in writing. For instance, a promise to pay a time
barred debt necessity be in writing and an agreement for a sale of immovable property necessity be
in writing and registered under the Transfer of Property Act, In such a situation, the agreement
necessity comply with the necessary formalities as to writing, registration, etc. If these legal
formalities are not accepted out, then the contract is not enforceable through law. After discussing
the essential elements of a valid contract, it should now be clear to you that all these elements
necessity be present in an agreement so that it becomes a valid contract. If any one of them is
missing or absent, the agreement will not be enforceable through law.