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Discuss a contract validity formed is considered as law discuss the validity of

this sentence in accordance with essential elements of contracts.
A contract is a legally binding promise made between at least 2 parties in order to fulfil
an obligation in exchange for something of value. Contracts can either be written, oral,
or a combination of both.

There are some contracts which must be in writing, including the sale of property or
a tenancy agreement for more than 12 months.

Contracts ensure that your interests are protected by law and that both parties will fulfil
their obligations as promised. If a party breaks the contract, there will be certain
solutions available to the parties (known as 'remedies').

Where possible, it is best to write a contract down. If the parties disagree on the terms
of the contract or they are unclear, it will be up to a court to decide what those terms
meant. The court will then have to look at how the services, promises, and exchanges
were carried out in order to identify the parties' intentions.

Key elements of a contract

For a contract to be valid, it must have four key elements: agreement, capacity,
consideration, and intention.

Agreement
Offer

An agreement happens when an offer is made by 1 party (eg an offer of employment) to

the other, and that offer is accepted. An offer is a statement of terms which the person
making the offer is prepared to be contractually bound to. An offer is different from an
invitation to treat which only invites someone to make an offer, and is not intended to be
contractually binding. For example, advertisements, catalogues and brochures where
prices of a product are listed are not offers but invitations to treat. If they were, then the
advertiser would have to provide everyone who 'accepted' them with the product
regardless of stock levels.

Acceptance

Acceptance of the offer must be unconditional (eg a signature on a contract of

employment) and it must be communicated. Any negotiations between the parties are
counter-offers, not acceptance.

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Staying silent is not generally considered acceptance, unless it is clear that acceptance
was intended (eg by way of conduct, like paying for a product). What constitutes as
adequate acceptance will vary depending on the type of contract.

Capacity
All parties must have the ability to understand the terms of and any obligations under
the contract. Also, consent to the contract must be freely given (eg there cannot be any
coercion/force, fraud, undue influence, or misrepresentation).

These type of people generally lack the capacity to enter into contracts:

 children under 18 - unless the contract is for necessities (food and clothing) or
education (an apprenticeship or employment contract) and the terms are fair and
benefit the child

 people suffering from mental health conditions or under the influence of drugs
and/or alcohol - only if the condition affects the person's ability to understand the
nature of the transaction or if the other party is aware of their incapacity

If a person lacking capacity has entered into a contract, it will generally be up to that
person to decide if they want to invalidate the contract.

Consideration
Parties must exchange some value for a contract to be binding. This is called
consideration. Consideration does not have to be adequate or for the benefit of the
other person, it merely has to be sufficient (eg if someone offers to sell their house for
nothing, there is no consideration; but if they offer to sell it for £1, then there is valid
consideration).

Examples of insufficient consideration include:

 an existing public duty (eg a police officer's duty to protect the public) or
contractual duty (eg the production of services already required by another
contract)

 something with sentimental value only

 something that occurred before the contract - consideration must move from the
contract (eg a gift received in January cannot be consideration for a contract
entered into in October)

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  anything illegal

Intention
Not all agreements between parties are contracts. It must be clear that the parties
intended to enter into a legally binding contract.

In the case of business agreements, the general assumption is that the parties intended
to enter into a contract.

In social situations, there is generally no intention for agreements to become legally

binding contracts (eg friends deciding to meet at a specific time would not constitute a
valid contract).

It is up to the person who wants the agreement to be a contract to prove that the parties
actually intended to enter into a legally binding contract.

Ending a contract
You can end a contract for convenience or for cause - read our guide on Ending a
contract for further information.

Contracts are valuable when they are used correctly. Keep these elements in mind to
ensure that your agreements are always protected.

Entering into a contract with a minor

The law presumes that some people do not have the power to make contracts. These
people are:

 children under 7 years

 people who are mentally insane

 people who are under the influence of drugs or alcohol

A minor between 7 and 18 years of age can therefore enter into a contract. There is a
presumption, however, that they do not understand the implications of entering into the
contract. This means that the minor remains protected, to the disadvantage of the other
party. The minor is able to cancel a contract at any time before reaching the age of 18,
and for a reasonable period afterwards without valid reason as the contract is 'voidable' .