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| Essential elements of valid contract |
- Intention to create legal relationship :
- Two Parties
- Capacity of Parties
- Free Concert
- Lawful objective
- Lawful consideration
- Agreement should not be declared void under any law
- Certainly and possibly of performance
- Compliance with legal formalities
Let's discuss all the essential elements of the valid contract in detail,
1. Intention to create legal relationship :
first of all there should be clear cut intention between both the parties to create legal relationship between them. if there is no such intention there is no contract at all in trade and commercial activities such intention is implied or presume by the law. the intention may be express or implied.
2. Two Parties :
They should be minimum two parties for making contract. one who is put in offer and other who is accepting it. But nowadays one party is playing different role in his life and accepting dual capacity. When person is acting in dual capacity he can make valid contract with himself. For example Nitin is a partner in partnership firm and is acting as a director also in a company.
3. Capacity of Parties :
Under section 11 "every person is competent to contract who is of the age of majority, having sound mind and not disqualified by any law to which is subject." In Indian contract act certain special provisions are made for the minor person whereby he can make valid contract with other major paisa for his benefit.
4. Free consent :
When the subject matter of the contract is understand by both the parties in the same sense and at the same time then the we can say that there is a constant of both the parties. For the validity of contract such consent must be free from coercion, undue influence flood misrepresentation or mistake etc.
5. Lawful object :
For the validity of the contract the object of the agreement must be lowful. Otherwise the contract will become illegal.
6. Lawful consideration :
Whatever consideration is given to each other must be lawful if consideration is unlawful then there is no valid contract between both the parties.
7. Agreement should not be declared is void under any law :
The contract act itself has declared certain agreement as void under section 24 to section 30. Moreover it should not be declared as void under any other law.
8. Compliance with legal formalities :
All the legal formalities regarding writing, registration, stamping, attestation, signing etcetera must be fulfilled otherwise such agreement becomes enforceable due to technical defect. After removing search defect the contract can be enforced by law.
9. Certainty and possibility of performance of agreement :
For the purpose of validity the agreement must be certain or definite. if it is uncertain or vague it cannot be enforced by law.
Similarly if agreement is impossible to perform then impossible act also not enforceable by law.
Above all are the essential elements of the valid contract if any is not available then the contract becomes unenforceable or it will become invalid contract.
