What are the legal requirements of a valid contract? “A contract?” What does that even mean?
You might not know this, but legal contracts play a major role in our daily lives whether you realise it or not. If you are accepting an offer for a new job, buying a house, or even simply just signing up for a Netflix subscription. You must sign a contract!
Let me break it down for you…
What is a contract?
A contract may be defined as an agreement entered by two or more persons with the intention of creating a legal obligation. The agreement as recognised by the law should be binding on the parties.
A contract is a juristic act which the law attaches the consequences intended by the parties. It depends on the terms agreed upon by parties and the terms implied by the law. The conclusion of a contract is necessarily bilateral or even multilateral.
A contract entails promises or undertakings on one or both sides. As a result of this, it can include:
- Making a certain performance,
- Giving something
- To do something or
- To refrain from doing something.
The basis of a contract is an agreement including the serious intention to create legally enforceable obligations. With this being said, most contracts entail reciprocity, in the sense that the one party’s performance is promised in exchange for the other party’s performance.
This sounds like a lot of legal terms, doesn’t it? this is part of Contract law after all.
Let me simplify this…
What are the requirements of a valid contract?
There are six requirements for a contract to be valid. This includes:
- Consensus:
The minds of the parties must meet on all material aspects of their agreement. This means that there must be an agreement between the parties.
- Contractual capacity:
The parties must have the necessary capacity to contract, for example, must not be mentally ill or an infant.
- Legality:
The agreement must be lawful, thus it must not be prohibited by statute or the common law. This suggests that the contract must be legal.
- Performance must be possible:
The obligation undertaken must be capable of performance when the agreement is entered into.
- Certainty:
The agreement must have a definite or determinable content so that the obligations can be ascertained and enforced.
- Formalities:
Where the agreement must take a certain form, for example: in writing and signed.
To conclude, those are the requirements for a legal contract to be valid. With that being said, if all the requirements mentioned above are met, the contract will be legally valid.
