What are the essentials of a valid contract? Discuss them briefly
1) Introduction
Law of contract 1872 provides the rules for commercial transactions. It is a very important branch of mercantile law. A contract is a legal arrangement between two or more parties that is enforceable by law. Contract law legally binds the parties to do or not to do some particular thing between the tenure of agreement. The major elements of a contract are offer, acceptance, and its aim is to create legal relations, and consideration. The contract act 1872 is prevail into the whole Pakistan and it does not goes against any other law of the country
2) Meaning of Contract
Following is the meaning of contract, according to the oxford dictionary is as under Oxford dictionary of law
“A legally binding agreement”
3) Definition of contract
A contract is written or spoken agreement between two or more persons to do something or not to do something for a specified time and it legally binds them and it is enforceable by law
4) Conditions for contract
There are two conditions for contract
I. An Agreement
II. An agreement should be enforceable by law. Contract = Agreement and Enforceability
5) Classifications of Contract
Following are the classifications of contract are as under
1. According to its Validity
Validity of contract means, an agreement which fulfils all the legal requirements and is enforceable by law is called valid contract
2. According to its formation
Formation of contract means, is the existence of offer and acceptance
3. According to its performance
Performance of contract' means contract should be capable of being performed
Example
If there is an agreement between A and B that , A will construct a house for B and B will pay 5 lakhs to A, that agreement is a contract
6) Essentials for valid contract
Following are the essentials for valid contract, details are given below
1. Proposal
There must be lawful proposal from one party to another party
2. Acceptance
There must be lawful acceptance from other party
3. Agreement
There should be an agreement between the two parties such as proposer and acceptor
4. Written
It is necessary elements that agreement between the two parties should be in written form
5. Lawful agreement
The agreement between the parties should be lawful, because unlawful agreement cannot be enforceable at law
6. Legal relationship
The parties must create a legal relationship and both the parties must have intention to go to the court it the other party does not meet his promise
7. Lawful object
The object of the contract should be lawful and does not violate the law, against the public policy or unlawful such as someone hires a house for gambling so that it will be unlawful object
8. Competency of Parties
Parties of the contract must be competent to enter into the contract. According to the contract
act 1872, every person is competent to contract who
1) Attained the age of maturity
2) Is of sound mind
3) Is not disqualified by law to enter into the contract
9. Consideration
Consideration plays a vital role in a contract. Consideration is a benefit and this benefit itself is the reason for the contract. Without consideration the contract would be considered as invalid
10. Free consent
For a valid contract, it is necessary that the consent of the parties must be free, and should
be free from any pressure or undue influence among the parties
11. Certain and definite
The agreement should be clarified in terms because if the terms of the agreement will
uncertain or confusing it will not be enforceable at law
12. Not declared void
Contract has not been declared void (Cancelled) according to any law of the country
because a void agreement is not enforceable by law and it has no legal authority
13. Possibility of performance
The agreement must be capable of being performed. If the parties have agreed upon a matter which is practically not possible to perform then the agreement will not be considered as valid contract
14. Legal formalities
In contract the legal formalities should be performed according to law such as writing of contract, attestation of contract or registration of contract is needed in law, otherwise it should not be enforceable by law
7) Conclusion
The agreement is a contract which is enforceable by law. An agreement becomes enforceable by law when it fulfils some conditions given into the contract act 1872 and these conditions may be called essentials of a valid contract. If any of the essential element is missing from the contract in this case such contract will be considered as illegal or unenforceable by law
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