Business relationships are deeply rooted in the law of contract’.
(a) What is a contract?
(b) State the essential elements of a valid contract.
(c) Briefly discuss any three of them.
Explanation
(a) A contract can be defined as an agreement between two or more persons which is intended by them to have legal consequences.
(b) The essential elements of a valid contract are:
(i) An offer and unqualified acceptance.
(ii) An intention to create legal relations.
(iii) Valuable consideration.
(iv) Contractual capacity of the parties.
(v) Genuiness of consent.
(vi) Legality of objectives.
(vii) Possibility of performance.
(viii) Certainty of terms.
Offer and Acceptance: In a valid contract, there must be an offer and unqualified acceptance by the two parties. Genuineness of consent: For a contract to exist the consent of the parties must be genuine. It must not be under duress, undue influence or misrepresentation.
Intention to create legal relations: It must be quite clear from the terms of the agreement that the parties intended to create a legally binding contract.