Elements of a Valid Contract is a repeated examination question in WAEC’s WASSCE. In addition to that, it is a topic researched by many people, especially students (including those writing WASSCE). A contract is a legally enforceable agreement.
Furthermore, WAEC has asked questions on this sub-topic many times in the Business Management WASSCE examination. Therefore, educareguide is here to assist you in to fully understand this topic very well.
The other ways that questions could be asked on this sub-topic are:
- Identity and explain briefly the important elements that must be present, for a contract to be valid.
- State and explain the features of a valid contract.
- What are the ingredients that must be present in a contract for it to be valid? Etc.
Furthermore, the sub-topic is an integral part of the Business Management for Senior High School Students across the West African sub-region. In detail, these countries include Nigeria, Ghana, Sierra Leone, The Gambia and Liberia. Now let’s look at the Elements of a Valid Contract below.
The important elements that must be present, for a contract to be valid.
- There must be agreement between the contracting parties: – One party must make an offer and the other party must accept the offer. This leads to an agreement which is known as “consensus ad idem”, which means “the meeting of the minds”.
- Intention to create legal relations: – The parties to a contract must have the intention to create a legal relation. This means that, the parties to the contract must intend that, where one party fails to perform his promise under the contract, the other can sue him for damages or be compelled in the law court to perform it. Therefor social agreements are not considered as contract.
- Consideration: – Each party to the contract must give valuable consideration. Henceforth, each party must give up something or make a promise in return for a benefit received. In other words, it means that each party to the contract must sacrifice something in order to benefit under the contract.
- Legality: – All contracts must be made legally. This means that, the purpose of the contract must not illegal. Thus, the contract must not be for an illegal purpose or contain terms, which are considered to be contrary to public policy.
- Formality: – It refers to the form in which the law requires the contract to take. For this reason, all specialty contracts must be made formally. In effect, they must be written, signed, sealed and delivered.
- Capacity: – Both parties must have contractual capacity. Truly, each party to a contract must be of age, that is, 18 years and above, and sound mind. For certain special contract, the person must qualify under law to engage in such contract, e.g. when a minister of state signs a contract on behalf of the president. Therefore, the law prohibits children, the insane, drunken persons from entering into a valid contract.
To conclude, I will say that elements of a valid contract must be learned well in order to ain every when he/she is entering into a contract.