Elements of a valid contract

 

Trust Maanda
Post Correspondent

A CONTRACT is an agreement between two or more parties that binds the parties to perform, or not perform, a particular obligation.

It is an agreement giving rise to enforceable obligations that are recognised by law.

In order for a contract to be valid, the contracting parties must have the capacity, while the subject of their contract must be lawful.

There must be serious intention to contract, called animus contrahendi; and meeting of the minds, also known as consensus ad idem.

It must be clear and unequivocal and the intention of both parties should be communicated.

The parties must intend to enter into the contract and create a binding legal relationship.

There must be an offer and acceptance.

 

An offer is an expression of willingness to contract, made with the intention that it is to be binding once accepted by the person to whom it is made.

An acceptance by the person to whom it is addressed to is an expression of assent to the terms of an offer.

There must also be a consideration, which is something of value given for the promise in order to make the promise enforceable as a contract.

There is no contract if any of the essential elements of a valid contract is missing.

For example, a contract of sale comprises of three essential elements, that is to say: an agreement between the parties to buy and sell, an agreement on the thing sold, known as the merx, and an agreement on the price, known as a pretium.

If one of the three things is missing, there is no sale agreement.

If it is a lease, there must be an agreement, firstly, to lease, secondly, particular premises and thirdly, the rentals to be paid.

If any one of the three elements is missing, there is no lease agreement.

A contract is void if, among other reasons, the subject of the contract is illegal, the terms are so vague as to be unenforceable or impossible to fulfil.

Other factors that render a contract void are lack of consideration, fraud, insanity, minority, etcetera. However, this list is not exhaustive.

A contract can either be written or oral.

An oral agreement is valid and binding, unless the law expressly requires it to be in writing. An oral contract is, however, difficult to prove.

It is sometimes referred to as the invisible contract because of lack of hard evidence of the existence of the contract.

A party who alleges its existence has the onus to prove it.

 

The essentials of a verbal contract are the same as of a written contract.

 

There must be a meeting of the minds or a reasonable belief by the parties that there is consensus.

The parties must agree on the terms and conditions of their contract.

 

The courts enforce what the parties have agreed on, regardless of how onerous the conditions may be against one party, except where the contract is otherwise unenforceable.

Courts do not rewrite a contract entered into between the parties or excuse any of them from the consequences of the contract that they have freely and voluntarily accepted, even if the terms are onerous or oppressive.

This is the position as a matter of public policy.

Courts do not interfere with the parties’ contracts, on the grounds of what is called sanctity of contract.

 

The principle of sanctity of contracts limit the court only to interpreting a contract and not creating a new contract for the parties.

 

The courts respect the contract made by the parties and give effect to it.

A person should refrain from signing the agreement if he or she does not understand the terms of the agreement.

 

The court will not sympathize with a party and shy away from enforcing the contract, even though the terms agreed upon prove to be onerous for that party.

Once a party signs an agreement, he or she is bound by it.

 

This is on the basis of the caveat subscriptor rule which means “let the signer beware”.

This is a rule that when a party signs a contract, he or she is bound by the ordinary meaning and effect of the words which appear above his signature.

It may be expensive to hire professional help for drafting an agreement but when a dispute arises from a shoddily and ineptly done agreement, drafting an agreement without professional help will be more expensive.

Caveat subscriptor! Signer beware.

 

◆ Trust Maanda is a legal practitioner and a partner at Maunga Maanda and Associates. He writes in his personal capacity. He can be contacted on +263 772432646