There are eight elements of a valid contract:

1. OFFER
A proposal, according to Section 2(a) of the Contracts Act1950 is an act or utterance signifying
the willingness of the person to be bound by his promises implied in the act or utterance and with
a view to obtaining the assent of the other person to the act or utterance. Furthermore, according
to Section 2 (a), an offer must signify the willingness of the proposer (offeror) to fulfil his
promises if accepted by the offeree that mean offer must be certain and also must be
differentiated from an enquiry. It is also must be differentiated from intent to trade. During the
build up to an agreement there is often a period of negotiation which differentiates an offer from
negotiations. The concept of intent to trade is one of the most important and must be thoroughly
understood. Besides, advertisements, catalogues and circulars are not usually an offer. If in doubt
read again the section on offer and differentiating from intent to trade. In an auction the bid is the
offer and acceptance is when the auctioneers hammer falls.

2. ACCEPTANCE
According to Section 2(b) of the Contracts Act specifies that when a person to whom an offer is
made signifies his assent thereto, the offer is said to be accepted. Acceptance may be expressed,
that is oral or written, and implied from the conduct of the offeree. An acceptance must also
comply with certain rules before it becomes valid and enforceable. Where an offer specifies the
form of acceptance, failure to accept in the specified form, unless the proposer does not object,
invalidates the acceptance. According to Section 7(a), the acceptance must be absolute and
unqualified. , it means that the offerees intention to accept must be clearly understood, without

any doubt, from his conduct. There are numerous circumstances in the commercial environment
where the conduct of certain parties appears to be acceptance but the law does not recognize such
conduct as acceptance.
3. CONSIDERATION
According to Section 2(d) of the Contracts Act, consideration is an act done or abstention from
doing an act, or a promise to do or a promise to abstain from doing, something. There are three
forms of consideration:

Executory
Executed
Past Consideration.

4. CAPACITY
Contractual Capacity is the legal ability to enter into a contract. Minors have particular rights and
obligations established by the court when it comes to contracts. Once a person reaches age 18,
they are considered a legal adult in every state in the nation. In addition to minors, other persons
are able to avoid contracts. Mentally impaired and intoxicated people, convicts, and aliens lack
the capacity to enter into a contract. In principle, every person is qualified to contract. According
to Section 10, every agreement made by the free consent of the parties competent to contract for
a lawful consideration and with a lawful object is a contract. But who is competent to contract?
According to Section 11 prescribes that a person who is of the age of majority and of sound mind
is competent to contract. According to the Age of Majority Act1971, for every individual person,
the age of majority is 18 years old. Sound mind is, according to Section 12 of the Contracts Act,
the capability of a person in understanding the contract and forming a rational judgment as to its
effect upon his interests and whether he is usually or occasionally of unsound mind. According to
Section 11, a person who has not reached the age of majority is not competent to contract.

5. INTENTION
The Contracts Act 1950does not contains any provision relating to intention of the parties to a
contract to be bound in law. Nevertheless, intention is an essential element of an enforceable
contract. In this respect, based on the Civil Law Act 1956, English law may be applied. In law,
agreements are categorized into two, which is family and social contracts or agreements and
commercial contracts or agreements.

6. FREE CONSENT
The meeting of two or more minds leads to the formation of an agreement. If this agreement
satisfies certain conditions, a legally enforceable contract is formed. On that basis, every contract
must be voluntarily done without any negative element which affects a persons capacity to make
independent decisions. Independent decisions are decisions which are made after due
consideration of the effects of a contract on the person. According Section 10 states that every
agreement is a contract if it is made by the free consent of the parties. And in Section 14 consent
is said to be free if it is not caused by coercion, undue influence, fraud, misrepresentation or
mistake.

7. CERTAINTY
Every term of an agreement must be certain or capable of being ascertained. Where the terms of
an agreement are not certain, the contract may be void. This is stated in Section 30 CA 1950.

8. VALID OBJECT