A contract is a legal agreement that creates a legal obligation between two or more parties to fulfil the promise for a lawful consideration with the lawful object. All agreements are illegal, void if these are barred by any existing law or parties have been barred by law to enter into a legal agreement. The courts only value such legal contracts, which are recognized by existing law.
All legal contracts are only enforceable by law if they are made by:??? parties competent to contract??? free consent of the parties;??? lawful consideration;??? Lawful object.
The legal agreement can be of any type, kind like sale agreement, employment agreement, services agreement etc.
Essential of valid agreement
All the agreements must fulfil the following requirements in order to attain the validity such as:
1. Offer and Acceptance
The initial essential of the legal agreement is that there must be valid offer from the one party to other party. The offer must be understandable. The other party must communicate the acceptance to enter into agreement to other party by prescribed mode before the expiry of the time period.
2. Competency of the parties
Both the parties must be competent to enter into agreement. There are following rules to test whether parties are competent to enter into contract or not such as:??? Both parties must attain the age of majority(i.e. both parties must not be minor);??? Both parties must be of sound mind;??? Both parties must not be forbidden by any law;??? Both parties must not be disqualified by law;??? Both parties must not be insolvent.
3. Lawful object
The object of the legal agreement must be lawful and not be forbidden by law. If the object of the agreement is unlawful e.g. to do criminal act etc then the agreement will be void abinitio i.e. illegal from the start. So the object of the legal agreement must be lawful in order to attain the enforceability and legality.
4. Free consent
Both parties must enter in to a legal contract with free consent. The consent is free consent if it is not caused by the:??? Undue influence;??? Coercion;??? Fraud;??? Misrepresentation ;??? Mistake of facts.
Consideration means something in return. The legal agreement must be based on valid legal consideration. There are following points to check the legality of the consideration such as:??? It must not be forbidden by law;??? It must not be immoral.
Consideration may be in any form like money, goods, services etc.
6. Intention of the parties
The legal agreement is only enforceable it clearly show the intention of the parties. Intention of the parties means both parties are willing to enter into contract and are willing to fulfil the terms of the legal agreement. Each party must be aware of the consequences of entering into the legal agreement.
A legal agreement is only valid if the both parties signed the agreement without undue influence and harassment.
Witnesses are essential part of the legal agreement. In case of dispute the court can rely on the statement of the witnesses. So the each witness must sign the legal agreement.