A contract is characterized by several basic elements, and the absence of these elements makes the contract void. These are explained as follows:
- Offer and Acceptance. A valid contract must be characterized by a legal offer and a subsequent acceptance of the offer. The offer and acceptance must meet the basic provisions of the contracts act.
- Aim to Form a Lawful Relation. For a contract to be valid, there must be a clear objective to form a legally binding relationship. Agreements recognized as being social or domestic do not make up a lawful relation. A promise by a father to purchase a toy car for his son does not give birth to a legal relationship.
- Lawful Consideration. Consideration refers to what is to be given by each party to a contract for a promise. For an agreement to be binding, each of the parties to it must give something in exchange for something else.
- The Capacity of Parties. Unless the parties to an agreement can form a contract, the contract will not be enforceable by law. The individuals agreeing must be old enough to do so and in the right frame of mind. Further to this, the law under which the parties exist and operate should not prohibit them from contracting.
- Free Consent. This implies that all the parties to an agreement have reached a mutually agreed to create a contract. Where one is forcefully made to enter into an agreement by another or in case an individual is made to contract through trickery, free consent is absent, and this results in a void contract.
- Lawful Object. Object here refers to what constitutes the subject matter of the agreement. The said object being agreed for must be within the confines of the law. Dishonesty or counterfeiting is not acceptable and consequently cancels out the agreement.
- Possibility of Performance. No agreement is valid if there is difficulty in having it accomplished. Any contract believed to be unworkable cannot be enforced.