Basic philosophy, which works behind a contract, is based on a Latin phrase, and this phrase states that agreement must be kept. However, only valid contract can be kept. And for making of a valid contract, essentials and purpose of the contract are the very importance.
According to Contract Act, an agreement, which is enforceable by law, is a contract.
3. Essentials of Valid Contract
Following are the main essentials of a valid contract.
i. Free Consent of Parties
An important essentials of a valid contract is that it should be made through free consent of parties to contract.
ii. Lawful and Moral Object
Another important element of a valid contract is that it should be made with lawful and moral object.
For making of a valid contract, it is essential that one party to contract should make a proposal to another party to contract.
For making of a valid contract, it is necessary that proposal should be accepted by the party to whom the proposal has been made.
v. Lawful Consideration
For making of a valid contract, it is essential that there should be lawful, moral and possible consideration, and that consideration should not be doubtful.
vi. Capacity of Parties
An important essential of a valid contract is that parties to contract should be capable of making contract. Persons like minor or insane cannot make a valid contract.
vii. Certainty of meaning
Another important essential of a valid contract is that wording of a contract must be clear and not uncertain or vague. Uncertainty makes a contract void.
viii. Legal Relationship
For making of a valid contract, it is necessary that contract should be made to create legal relationship between the parties and to define their legal rights and responsibilities under the contract.
ix. Enforceable by Law
As agreements, which are enforceable by law, are contracts, therefore it is essential that contract should be capable of being performed or enforced under law.
To conclude, it can be stated that a contract, which does not have main essentials of a valid contract, cannot be considered a valid contract. However, a valid contract can be either oral or written one.