An offer is a definite and clearly defined promise to undertake a particular task. However, an offer elapses upon expiry of period of acceptance, withdrawal of offer before its acceptance and after a certain time bound considered reasonable depending on the circumstances of the agreement. Nevertheless, a mere declaration of willingness by one party to engage another party in negotiations is treated as an invitation to treat and such negotiations can never constitute a binding contract.
Acceptance comprises taking an offer as exactly as initially offered without conditions. Therefore, any form of additional conditions to an offer results into a counter offer that may be accepted or rejected as well. Acceptance may be by word of mouth, written, or implied by actions of the offeree.
The validity of a contract must have a valuable benefit between the contractual parties. Every party has an obligation to reward each other for the promises made. The consideration must not necessarily be in form of cash, but can be anything of value including the promise itself. However, the payments if be, need not to be fair, thus, the courts can only come in if there was fraud, unconscionable behavior or where one party was under duress while engaging in the contract.
Contractual parties must have the legal capacity to execute a contract; hence, persons of age of majority and are sound mind have the legal capacity. Therefore, minors and people of unsound minds do not possess the legal capacity to participate in contractual obligations.
- Legality/legal purpose
The intention of the contract must be creation of legal relationships between the contracting parties. The object of the contract must be valid and not one that; is prohibited by law; conflicts any provision of any law; fraudulent; injures an individual or property of another person or the court considers it as immoral or against public policy.
In conclusion, the above elements are essential for validity and subsequent enforceability of any contract.