• Lawful offer by one party and lawful acceptance by the other party • Terms of offer must be definite and clear • The acceptance must be absolute and unconditional • The acceptance must be according to the mode prescribed and must be communicated to the offeror Lawful consideration • Something in return • Agreement is legally enforceable only when both the parties give something and get something in return Intention to create legal relationship • Intention must be to create legal relationship between them • Case: Balfour v. Balfour- no legal relationship • Mc.Gregor v. Mc.Gregor- legal relationship exists Competent parties • Must be capable of entering in to a valid contract • Every person is competent to contract if he: • Is of the age of majority • Is of sound mind • Is not disqualified from contracting by any law to which he is subject Free consent • Consent is said to be free when it is not caused by: • Coercion • Undue influence • Fraud • Mis-representation • mistake Lawful object • Must not be illegal, immoral or opposed to public policy • Eg: when ‘A’ hires a house to use as a gambling house, the object is not lawful and thus not a valid contract Agreement not declared void • Must not have been expressly declared void by law in force in the country • Eg: agreement in restraint of trade, marriage, legal proceedings Agreement not declared void • Must not have been expressly declared void by law in force in the country • Eg: agreement in restraint of trade, marriage, legal proceedings Possibility of performance • Should be capable of performance • If the act is impossible in itself, physically or legally, it cannot be enforced • Eg: a contract to bring stars from the sky Certainty of Meaning • According to section 29, an agreement the meaning of which is not certain is void • Eg: ‘A’ agree to sell to ‘B’, a 100 tons of oil. There is nothing to show what kind of oil was intended. The agreement is void for uncertainty Legal formalities • A contract may be made by words spoken or written