Contracts are a basic necessity for businesses and individuals alike, as they provide the legal framework for any transaction or agreement. However, it is essential to ensure that these contracts meet certain requisites or criteria to make them legally binding. In this article, we will discuss the three essential requisites of a contract.
The first requisite of a contract is an agreement between the parties involved. This means that both parties must have reached a common understanding of the terms and conditions of the agreement. The agreement must be clear, concise and unambiguous. It should not be subject to any misunderstanding or misinterpretation.
The agreement must also be free from duress, undue influence, fraud or misrepresentation. This means that the parties involved should not be coerced, deceived or misled into signing the agreement. It is important that both parties enter into the agreement voluntarily, and with a clear understanding of the terms and conditions.
The second requisite of a contract is consideration. In contract law, consideration refers to something of value that is given by one party in exchange for something of value given by the other party. This means that each party must provide something of value to the other party.
Consideration can take many forms, including money, goods, services, promises, or even the forbearance of an act. It is important that the consideration given by each party is sufficient, meaning that it is of equal value to the consideration given by the other party.
3. Legal Capacity
The third requisite of a contract is legal capacity. This means that the parties involved in the agreement must have the legal capacity to enter into a contract. This includes being of legal age, having the mental capacity to understand the terms and conditions of the agreement, and not being under any legal disability such as bankruptcy.
It is important that both parties have the legal capacity to enter into the contract; otherwise, the contract may be deemed unenforceable. This means that the contract will not be legally binding, and the parties involved may not be able to enforce its terms and conditions.
In conclusion, these are the three essential requisites of a contract: agreement, consideration, and legal capacity. It is important to ensure that all these requisites are met when drafting a contract to make it legally binding. Failing to meet any of these requisites can result in a contract being unenforceable, which can lead to disputes and legal complications. Therefore, it is essential to work with a legal expert to draft a contract that meets all the necessary requisites.