Question

provide a very brief explanation of the major elements of an enforceable contract;

Consensus

Consideration

Capacity

Legality

Intention

Answer 1

Consensus Ad Idem: The parties to the agreement must have agreed about the subject matter of the agreement in the same sense and at the same time. Unless there is consensus ad idem, there can be no contract

Consideration: Consideration is “something in return.” Consideration has been defined as the price paid by one party for the promise of the other. Example: X agrees to sell his motorbike to Y for Rs. 1,00,000. Here Y’s promise to pay Rs. 1, 00,000 is the consideration for X’s promise to sell the motorbike and X’s promise to sell the motorbike is the consideration for Y’s promise to pay 1, 00,000

Capacity: Capacity of Parties It means that the parties to an agreement must be competent to contract. A contract by a person of unsound mind is void ab-initio. Thus, a contract entered into by a minor or by a lunatic is void. Example: X a minor borrowed Rs 8,000 from Y and executed a mortgage of his property in favor of the lender. This was not a valid contract because X is not competent to contract.

Legality: Enforceable by law An agreement, to become a contract, must give rise to a legal obligation or duty. An agreement may be a social agreement or legal agreement. But only those agreements which are enforceable in a court of law are contracts.

Intention: An offer must be distinguished from a mere declaration of intention: Sometimes there may be preliminary discussion or an invitation by one party to the other to negotiate terms or simply declaration of intention. Such declaration merely indicates that an offer will be made in future