ASSIGNMENT NO:1

ESSENTIAL ELEMENTS OF VALID CONTRACT

 Proper offer and acceptance
 Intension to create legal relationship
 Free consent
 Capacity of parties
 Lawful consideration
 Lawful object
 Agreement not expressly declared void
 Certainty of meaning
 Possibility of performance
 Legal formalities
EXPLANATION:
 PROPER OFFER & ACCEPTANCE:
if a contract must be valid there
should be an agreement between two parties .for a
valid contract there should be an offer and
acceptance for the contract .the contract which
means the work that have to done by an another
 party to complete that particular job and the offer
should be accepted by the another party to do the
work within a given time .these are the two basic
elements for a contract to be valid .the both parties
should be communicate with them to avoid
misunderstanding in the future.
 INTENSION TO CREATE LEGAL RELATIONSHIP:
The contracts that have made
is also to create a legal relationship between the
two parties and also there should be an intension
between the two parties to approve the contract as
a valid and also as official.
 FREE CONCENT:
The valid contract must be a
free consent to the both parties .the free consent
should be free from any type of coercion, undue
influence, fraud, misrepresentation or mistakes.
 CAPACITY OF PARTIES:
The valid contract must be
included with the capacity of members which who
are included in this work .the persons whose name
 which are included in the contract are the only
persons who want to do the work. As per the
sec.10 competency of a party is one of the
essential elements of valid contract .thus parties
having contracting capacity would make the
contract valid and therefore such a contract would
be enforceable in the court of law.
 LAWFUL CONSIDERATION:
One of the most essential elements of a
valid contract is the presence of ‘consideration’.
Consideration has been defined as the price paid by
one party for the promise of the other. An agreement
is legally enforceable only when each of the parties to
it gives something and gets something .The
consideration may be an act (doing something) or
forbearance (not doing something) or a promise to do
or not to do something. It may be past, present or
future. But only those considerations are valid which
are ‘lawful’.
 LAWFUL OBJECT:
For a valid contract all the parties who are
included in the contract should accept the lawful
objects and public policies which are provided by
the government which comes under Sec.23. if the
objects are unlawful that above given policies
which haven’t followed then the contract has been
void.
 AGREEMENT NOT EXPRESSLY DECLARED VOID:
For a valid contract the agreement
which is not expressly declared is called as void.
The valid contract should show their agreement
expressly to the government to make the contract
as valid by accepting the policies which are given
by the government.
 CERTAINTY OF MEANING:
The meaning of certainty is comes
under the Contract Act Sec.29 says that “the
meaning of which is not certain, are void”. The
contract to be valid must not be vague or
uncertain. It must be possible to ascertain the
meaning of the agreement, for otherwise, it cannot
be enforced.
 POSSIBILITY OF PERFORMANCE:
 The essential feature of a valid contract is that it must
be capable of performance. It is under the section 56
which says that “an agreement t do an act impossible
in itself is void”. If the act is impossible in itself,
physically or legally, the agreement cannot be
enforced at law.
 LEGAL FORMALITIES:
When a contract is to be valid then
it should follow the certain legal formalities such as
registration, writing, they must be followed.
Writing is an essential one for the valid in order to
effect a sale, lease, mortgage, gift of immovable
property etc…., Registration is required in such
cases and legal formalities in the relevant
legislation should be strictly followed.

By
V.KIRAN KUMAR (B.COM CA)
[ 171CC010]