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Agreement is an essential element of contracts, but not all agreements are contracts.- Contracts are valid when there is a lawful consideration (lawful exchange, or something in return).There is no miss-representation of information.
Agreement is an essential element of contracts, but not all agreements are contracts. There is a social agreement, for instance, you invite your friend over a dinner but you could not make it. In this respect, there is no binding obligation or legal obligation, it is just a social agreement. However, if you employed by a company then you and the company have to agree to terms and sign contracts that creates legal obligation.
• Contracts can be valid if they satisfy the following conditions, otherwise they are void. The following condition describes when contracts are valid:
Contracts declared to be valid, if there is an agreement between the contracted parties.
Contracts are valid if the condition of capacity to contract is met. Capacity to contract refers to contracted parties are above maturity age and they must be sound of mind (free from insanity).
Contracts are valid when there is a lawful consideration (lawful exchange, or something in return).
Contracts are valid if there are free and genuine consents. There are no threats or use of illegal exercise to force one party to enter into a contract. There is no miss-representation of information. Miss-representation refers to providing a false information to make the contract appeals to the other one.
Contracts are valid if they have the necessary legal formalities, which means contracts are stamped and authorized by the relevant authorities. Contracts are valid if they have the possibilities to be performed.
Contracts should have certainty of meaning, otherwise it is declared void. Contracts should be free from unclear statement, straight and carries one meaning and not many interpretations.
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