Essential Elements of a Valid Contract

The following are the essential elements for a valid contract −

●      An offer proposed by one party should be accepted by the other party which results in a point of agreement.

●      Both the parties should be in consent of creating a legal relation and stay prepared for legal consequences.

●      The agreement should be in the consent of the law.

●      The contracting parties must be legally eligible for the contract.

●      The consent of both the parties must be genuine.

●      The aims and objective of the contract should be legally acclaimed and should not oppose any policy of the public.

●      There should be precise and clear terms and conditions in the contract.

●      The agreement should be practically possible to be enacted.

Proposal or Offer

Making an offer is one of the initial steps in creating a contract. An offer or a proposal must be made by the first party, which initiates the contract to the second party. The first party is often termed as the offeror and the second party is often termed as the offeree. If the offeree accepts the entire offer without any negotiations or changes, the contract comes into existence.

Rules Administrating Offers

The following rules must be followed for the validation of an offer −

●      It is mandatory for an offer to be clear, complete, definite and final.

●      For an offer to be effective, it must be conveyed to the offeree so that the offeree gets the choice to accept or reject the offer.

●      The offer can be conveyed orally or in a written document or may be implied by the conduct.

●      An offer may be made to the general public or to a specific person or to a specific group of people.


It is only upon the acceptance of an offer that a contract comes into existence. Acceptance of an offeree can be defined as the point when the offeree agrees with the terms & conditions and interest of the offer and gives his consent in compliance of the offer. A proposal becomes a promise when it is accepted.

Rules Administrating Acceptances

●      It is mandatory for the acceptance to be unqualified and absolute.

●      The acceptance must comply with all the terms and conditions of the offer.

●      Acceptance can be expressed orally or in a written document or may be implied by the conduct.

●      A conditional acceptance or a return offer may is considered as a rejection to the offer and may contribute to lapse of the offer.

●      The offerer should be conveyed of the acceptance by the offeree. If, in any case, the offeree intends to accept the offer but does not convey the acceptance, the offer is not considered accepted.

●      No communication to the offerer is required for acceptance of an offer that requires some actions to be invoked as a response or sign of acceptance.

●      The offeree must accept the offer within the specified time limit of the offer.

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