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ELEMENTS OF A VALID CONTRACT

1) Agreement: complete offer made by one an accepted by the other party.

2) Intention to contract: both parties intend to create a legally binding contract.

3) Capacity to contract: All people over the age of 18 have the legal ability to enter into a contract except anyone under the age of 18 or people who are mentally ill.

4) Consent to contract: The parties entering into a contract must do so voluntarily. A contract is invalid if a party is put under pressure or a genuine mistake is made by either party to the

contract.

5) Consideration: Each party in the contract must give something of value to the other party. They both must gain from the contract.

6) Legality of purpose: A legally binding contract must be created for a legal purpose. eg: a valid contract to buy illegal fireworks can not exist.

7) Legality to form: Contracts must be drawn up in the correct legal format. This can be done orally, in writing or by conduct. eg: a contract to purchase a property or an insurance policy must be in writing.