What are the essentials of a contract?

Following are the essentials of valid contract −

  • Agreement − For a valid contract, agreement is the most essential element, which consists of offer and acceptance.

  • Two parties − Minimum two parties are required for a contract. One will offer the contract and the other will accept the contract.

  • Free consent − Consent is said to be free consent, if it is not created by force, needless influence, cheating, misrepresentation or fault.

  • Legal relationships − These are must for parties to be in a contract because agreements are not enforceable by law.

  • Capacity of contract − Ability of person/party to enter into a valid contract.

According to the Section 11 of Indian Contract Act, 1872, a competent to contract should

  • Have a sound mind.
  • Not be disqualified by any law.
  • Have an age of majority according to the law.


The qualifications which are required for a contract are as follows −

  • Person should be above 18 years of age.

  • Person should understand the implications of a contract.

  • Person should not be disqualified by law.

The other essential aspects for a contract are as follows −

Legal formalities

In case of movable properties’ registration of contracts under laws which are in force at times. Contract of insurance is not valid except for the written contracts.


Something in return, one party may take interest, profit etc. and another party may take detriment, some forbearance etc.


An agreement must be certain. In an agreement, it should be clearly mentioned as to what it required.

Legal object

Section 23 states that objects/considerations are not lawful if it is prohibited by the law.


Terms of the agreement should be capable. The terms should be such that they can’t be enforced.

Not expressly declared to be void

An agreement is said to be illegal, if it is expressly prohibited by the law.