Traditionally commercial transactions were sanctioned by verbal agreements between contracting parties, and there were mechanisms of dealing with any forms of breach thereto. However, as times changed operations became complex, and individuals saw the need for having written contracts to bind parties to the terms and conditions of an agreement. The law is therefore in place to enforce valid contracts that satisfy all elements that are installed to determine the validity of a contract. Six essential elements determine the validity of a contract, and they include the offer, acceptance, consideration, intention to create legal relation and capacity. In essence, if any contract lacks any of these elements then it is void in its entirety.
These Essential Elements Are Discussed As Follows;
The first and fundamental element of a contract is an offer because it symbolizes the beginning of a contractual relationship between parties. Basically, an offer is a promise by one party to another indicating their willingness to do or refrain from doing a specified act. It is important to note that an offer excludes preliminary negotiations that could include advertisements, invitations, and catalogs.When an offer is made, the contracting parties must express their intentions expressly and voluntarily.
An offer is usually characterized by terms and conditions that will guard the dispensation of a contract. Therefore acceptance is signified through an expression by the offeree to be bound by the stipulated terms and conditions in the contract. An offeree must indicate his intention to accept the offer as proposed by the offeror unequivocally and unconditionally.
A contractual agreement is based on an exchange of value between the offeror and the offeree. The value need not be in the form of currency, but there must be a mutual benefit as stipulated in the offer. Also, consideration could be performance or non-performance of certain acts.
Any person purporting to enter a contractual relationship must have the legal capacity and competence to do so. In most jurisdictions, for a person to undertake a valid contract they must be over the age of 18 years. Also, mentally unstable individuals cannot contract legally without the aid of a lawfully designated agent. Further, errant employees cannot purport to contract without express or written authority from their principles.
Intention To Create Legal Relation
A contract is based on a meeting of two minds, and that means that there must be a mutual expression of an intention to be bound by the law. Both parties ought to recognize that their contract is subject to legal enforcement.…