Explain the elements of a valid contract. - Leaving Cert Business - Question C - 2006

Consideration refers to something of value that is exchanged between the contracting parties. It can be money, goods, services, or a promise to refrain from doing something. Both parties must provide consideration to make the contract enforceable, meaning it's not merely a gift.

The parties must demonstrate a clear intention to enter into a legally binding agreement. This shows that they understand the implications of their agreement and are ready to fulfill their contractual obligations.

Consent involves the mutual agreement of the parties to the terms of the contract. Consent must be free of duress, misrepresentation, undue influence, or fraud, ensuring that both parties willingly enter the contract.

Each party involved in a contract must have the legal capacity to do so. Generally, this means that they are of legal age, sound mind, and not mentally incapacitated. Minors and individuals under the influence may lack the capacity to enter a valid contract.

Some contracts must be in a specific form to be valid, such as written contracts for real estate transactions. The legality of form ensures that all legal requirements regarding documentation and format are met.

The purpose of the contract must be lawful. Contracts that involve illegal activities or violate public policy are not enforceable in court. Both parties should ensure that the contract's objectives are legal.