WHAT ARE THE ELEMENTS OF A CONTRACT?
For a contract to be established, the following have to be existing:
· Offer and acceptance (an agreement)
· Consideration
· Intention to create legal relations
· Capacity
OFFER:
A definite expression of willingness to be held accountable on specified
terms without any further changes to the agreed terms, which can be written or verbal.
terms without any further changes to the agreed terms, which can be written or verbal.
ACCEPTANCE:
Consent to the specified terms without varying the offeror’s terms,
which can be written or verbal and must be absolute and made while the offer can still be executed.
which can be written or verbal and must be absolute and made while the offer can still be executed.
CONSIDERATION:
Something of value which is given or promised to be done in exchange for the action of the other party to the contract and must be sufficient but
doesn’t have to be adequate. It must not be made after the other party may have carried out the agreed action, i.e. it must not be past consideration.
doesn’t have to be adequate. It must not be made after the other party may have carried out the agreed action, i.e. it must not be past consideration.
INTENTION TO CREATE LEGAL RELATIONS:
Mutual understanding by both parties to a contract that they intend the agreement to be legally binding and enforceable.
CAPACITY:
Both parties to the contract are competent people who have the ability
to carry out the required tasks or actions to fulfill the contract being entered into and are not under any undue duress.
to carry out the required tasks or actions to fulfill the contract being entered into and are not under any undue duress.
Note:
A seller or a buy can make an offer and a
counter-offer.