ESSENTIAL ELEMENTS OF A VALID CONTRACT
ESSENTIAL ELEMENTS OF A VALID CONTRACT
Section 10 of the Indian Contract Act, 1872
provides that "all agreements are contracts if they are made by the free
consent of parties competent to contract, for a lawful consideration and with a
lawful object, and are nothereby expressly declared to be void".
The
essential elements of a valid contract are:
(i) An
offer or proposal by one party and acceptance of that offer by another party
resulting in an agreement-consensus-ad-idem.
(ii) An
intention to create legal relations or an intent to have legal consequences.
(iii)
The agreement is supported by lawful consideration.
(iv) The parties to contract are legally capable
of contracting.
(v) Genuine consent between !he parties.
(vi) The object and consideration of the contract
is legal and is not opposed to
public policy.
(vii)
The terms of the contract are certain.
(viii)
The agreement is capable of being performed Ie., it is not impossible of being
performed.
Therefore, to form a valid contract
there must be (1) an agreement, (2) based on the genuine consent of the
parties, (3) supported by consideration, (4) made for a lawful object, and (iv)
between the competent parties.
(a) Offer or Proposal and Acceptance
One
of the early steps in the formation of a contract lies in arriving at an
agreement between the contracting parties by means of an offer and acceptance.
Thus, when one party (the offeror) makes a definite proposal to another party
(the offeree) and/ the offeree accepts it in its entirety and without any
qualification, there is a meeting of the minds of the parties, and a contract
comes into being, assuming that all other elements are also present.
What is an Offer or a Proposal?
An
offer is a proposal by one person, whereby he expresses his willingness to
enter into a contractual obligation in- return for a promise, act or
forbearance. Section 2(a) defines proposal or offer as "when one person
signifies to another his willingness to do or abstain from doing anything with
a view to obtaining the assent of that other to such act or abstinence, he is
said to make a proposal."
Rules
Governing Offers
A
valid offer must comply with the following rules:
(a)
An offer must be clear, definite, complete and final. It must not be vague. For
example, a promise to pay an increased .price for a horse if it proves lucky to
promiser, is too vague and is not binding.
(b)
An offer must be communicated to the offeree. An offer becomes effective only
when it has been communicated to the offeree so as to give him an opportunity
to accept or reject the same.
(c) The
communication of an offer may be made by express words-oral or written-or it
may be implied by conduct. A offers his car to B for Rs. 10,000. It is an
expre~s offer. A bus plying on a definite route goes along the street.
This
is an implied offer on the part of the owners of the bus to carry
passengers at the scheduled fares for the various stages.
(d)
The communication of the offer may be general or specific. Where an offer is
made to a specific person it is called specific offer and it can be
accepted only by that person. But when an offer is addressed to an uncertain
body of individuals Le. the world at large, it is a general offer and
can be accepted by any member of the general public by fulfilling the condition
laid down in the offer. The leading case on the subject is Carlill v. Carbolic
Smoke Ball Co. The company offered by advertisement, a reward of £ 100 to
anyone who contacted influenza after using their smoke ball in the specified
manner. Mrs. Carlill did use smoke ball in the specified manner, but was
attacked by influenza. She claimed the reward and it was held that she could
recover the reward as general offer can be accepted by anybody. Since this
offer is of a continuing nature, more than one person can accept it and can
even claim the reward. But if the offer of reward is for seeking some
information or seeking the restoration of missing thing, then the offer can be
accepted by one individual who does it fi rst of all. The condition is that the
claimant must have prior knowledge of the reward before doing that act or
providing that information.
Example:
A advertise in the newspapers that he will pay rupees one thousand to
anyone who restores to him his lost son. B without knowing of this
reward"finds A's
ost son and restore him to A. In this case
since B did not know of the reward, he
~
cannot
claim it from A even though he finds A's lost son and restores him to A.
In
India also, in the case of Harbhajan Lal v. Harcharan Lal (AlA
1925 All. 539), the same rule was applied. In this case, a young boy ran away
from his father's home. The father issued a pamphlet offering a reward of As.
500 to anybody who would bring the boy home. The plaintiff saw the boy at a
railway station and sent a telegram to the boy's father. It was held that the
handbill was an offer open to the world at large and was capable to acceptance
by any person who fulfilled the conditions contained in the offer. The
plaintiff substantially performed the conditions and was entitled to the.
reward offered.
An Offer must be Distinguished from
(a)
An invitation to treat or an invitation to make an offer: e.g.,
an auctioneer's request for bids (which are offered by the bidders), the
display of goods in a shop window with prices marked upon them, or the display
of priced goods in a self-service store or a shopke.eper's catalogue of prices
are invitations to an offer.
(b)
A mere statement of intention: e.g., an announcement of a coming auction
sale. Thus a person who attended the advertised place of auction could not sue
for breach of contact if the auction was cancelled (Harris v. Nickerson
(1873) L.A. 8 QB 286).
(c) A mere
communication of information in the course of negotiation: e.g., a
statement of the price at which one is prepared to conside( negotiating the
sale of piece of land (Harvey v. Facey (1893) A.C. 552).
An
offer that has been communicated,properly continues as such until it lapses, or
until it is revoked by the offeror, or rejected or accepted by the offeree.
Lapse of Offer
Section 6 deals with various
modes of lapse of an offer. It states that an offer
lapses
if
(a)
it is not accepted within the specified time (if
any) or after a reasonable
time,
if none is specified.
(b)
it is not accepted in the mode prescribed or if
no mode is prescribed in
some
usual and reasonable manner, e.g., by sending a letter by mail when early reply was requested
(c)
the offeree rejects it by distinct refusal to
accept it;
(d)
either the offerer or the offeree dies before
acceptance;
(e)
the acceptor fails to fulfill a condition
precedent to a acceptance.
(f)
the offeree makes a counter offer, it amounts to
rejection of the offer and an offer by
the offeree may be accepted or rejected by the offeror.
Revocation
of Offer by the Offeror
An
offer may be revoked by the offeror at any time before acceptance.
Like
any offer, revocation must be communicated to the offeree, as it does not take
effect until it is actually communicated to the offeree. Before its actual
communication, the offeree, may accept the offer and create a binding contract.
The revocation must reach the offeree before he sends out the acceptance.
An
offer to keep open for a specified time(option) is not binding unless it is
supported by consideration.
Acceptance
A
contract emerges from the acceptance of an offer. Acceptance is the act of
assenting by the offeree to an offer. Under Section 2(b) of the Contract Act
uwhen a person to whom the proposal is made signifies his assent thereto, the
proposal is said to be accepted. A proposal, when accepted becomes a
promise.".
Rules
Governing Acceptance
(a)
Acceptance may be express Le. by words spoken
or written or implied
from the conduct of the parties.
(b)
If a
particular method of acceptance is prescribed~-Ae. offer must be accepted in
the prescribed manner. "
(c)
Acceptance must be unqualified and absolute and
must correspond with all the terms of the offer.
(d)
A counter offer or conditional acceptance
operates as a rejection of the offer and causes it to lapse, e.g., where a
horse is offered for Rs. 1,000 and the offeree counter-offers Rs. 990, the
offer lapses by rejection.
(e)
Acceptance must be communicated to the offeror,
for acceptance is complete the moment it is communicated. Where the offeree
merely intended to accept but does not communicate his intention to th.e
offeror, there is no contract. Mere mental acceptance is not enough.
(f)
Mere silence on the part of the offeree does not
amount to acceptance. Ordinarily, the offeror cannot frame his offer in such a
way as to make the silence or inaction of the offeree as an acceptance. In
other words, the offeror can prescribed the mode of acceptance but not the mode
of rejection. In Felthouse v. Bindley
(1865), F offered by letter to buy his nephew's horse for £ 30 saying:
"If I hear no more about him I shall consider the horse is mine at £
30". The nephew did not reply, but he told an auctioneer who was selling
his horses not to sell that particular horse because it was sold to his uncle.
The auctioneer inadvertently sold the horse. Held: F had no claim
against the auctioneer because the horse had not been sold to him, his offer of
£ 30 not having been accepted.
(g)
If the offer is one which is to be accepted by
being acted upon, no communication of acceptance to the offeror is necessary,
unless communication is stipulated for in the offer itself.
Thus,
if a reward is offered for finding a lost dog, the offer. is accepted by
finding the dog after reading about the offer, .and it is unnecessary before
beginning to search for the dog to give notice of acceptance to the offeror.
(h)
Acceptance must be given within a reasonable time
and before the offer lapses or is revoked. An offer becomes irrevocable by
acceptance.
An
acceptance never precedes an offer. There can be no acceptance of an
offer which is not communicated. Similarly, performance of conditions of an
offer without the knowledge of the specific offer, is no acceptance. Thus in Lalman
Shukla v. Gauri Duff (1913) where a servant
brought the boy without knowing of the reward, he was held not entitled to
reward because he did not know about the offer.
Standing
Offers
Where
a person offers to another to supply specific goods, up to a stated quantity or
in any quantity which may be required, at a certain rate, during a fixed
period, he makes a standing offer. Thus, a tenderto supply goods as and when
required, amounts to a standing offer.
A
standing offer or a tender is of the nature of a continuing offer. An acceptance of such an offer merely amounts
to an intimation that the offer will be
considered to remain open during the period specified and that it will be
accepted from time to time by placing order during the period specified
quantities. Each successive order given,
while the offer remains in force, is an acceptance of the standing offer as to
the quantity ordered, and creates a seperate contract. it does not bind either party unless and
until such orders are given.
Where
P tendered to supply goods to L upto a certain amount and over a certain
period, L's order did not come up to the amount expected and P sued for breach
of contract Held: Each order made was a separate contract and P was
bound to fulfill orders made, but th~re was no obligation on L to make any
order to all (Percival Ltd. v. L.C.C. (1918).
Tickets
Tickets
purchased for entrpnce into places of amusement, or tickets issued by railways
or bus companies, clock-room tickets, and many other contracts set out in
printed documents contain numerous terms, of many of which the partly receiving
the ticket or document is ignorant. If a passenger on a railway train receives
a ticket on the face of which is printed Hthis ticket is issued subject to the
notices, regulations and conditions contained, in the current time-tables of
the railway", the regulations and conditions referred to are deemed to be
communicated to him and he is bound by them whether or not he has read them. He
is bound even if he is illiterate and unable to read them. But it is important
that the notice of the conditions i,s contemporaneous with the making of the contract
and not after the contract has been made.
Contracts by Post
Contracts by post are subject to the same rules
as others, but because of their importance, these are stated below separately:
(a)
An offer by post may be accepted by post, unless
the offero(indicates anything
to
the contrary.
(b)
An offer is made only when it actually reaches
the offeree and not .before, i.e., when the letter containing the offer is
delivered to the offeree.
(c)
An accepta.nce is made as far as the offeror is
concerned, as soon as the
letter
containing the acceptance is posted, to offeror's correct address; it binds the
offeror, but not the acceptor.
An
acceptance binds the acceptor only when the letter containing the
acceptance
reaches the offeror. The result is that the acceptor can revoke his acceptance
before it reaches the offeror.
(d)
An offer may be revoked before the letter
containing the acceptance is posted. An
acceptance can be revoked before it reaches the offeror.
Contracts
over the Telephone
Contracts
over the telephone are regarded the same in principle as those negotiated by
the parties in the actual presence of each other. In both cases an oral offer
is made and an oral acceptance is expected. It is important that the acceptance
must be audible, heard and understood by the offeror. If during the
conversation the telephone lines go, "dead" so that the offeror does
not hear the offeree's word of acceptance, there is no contract at the moment.
If the whole conversation is repeated and the offeror hears and understands the
words of acceptance, the contract is complete (KanhaiyalaJv.
Dineshwarchandra (1959) AIR, M.P. 234).
b) Intention to Create Legal
Relations
The second essential element of a
valid contract is that there must be an intention among the parties that the
agreement should be attached by legal consequences and create legal
obligations. If there is no such intention on the part of the parties, there is
no contract between them. Agreements of a social or domestic nature do not
contemplate legal relationship. As such they are not contracts.
A
proposal or an offer is made with a view to obtain the assent to the other
party and when that other party expresses his willir19ness to the act or
abstinence proposed, he accepts the offer and a contract is made between the
two. But both offer and acceptance must be made with the intention of creating
legal relations between the parties. The test of intention is objective. The
Courts seek to give effect to the presumed intention of the parties. Where
necessary, the Court would look into the conduct of the parties, for much can
be inferred from the ~onduct. The Court is not concerned with the mental
intention of the parties, but rather with what a reasonable man would say, was
the intention of the parties, having regard to all the circumstances of the
case.
For
example, if two persons agree to assist each other by rendering advice, in the
pursuit of virtue, science or art, it cannot be regarded as a contract. In
commercial and business agreements, the presumption is usually that the parties
intended to create legal relations. But this presumption is rebuttable which
means that it must be shown that the parties did not intend to be legally
bound.
c)
Consideration
Need for Consideration
Consideration is one of the
essential elements of a valid contract. The requirement
of
considera,tion stems from the policy of extending the arm of the law to the enforcement
of mutual promises of parties. A mere promise is not enforceable at law. For
example, if A promises to make a gift of Rs. 500 to B, and subsequently changes
his mind, B cannot succeed against A for breach of promise, as B has not. given
anything in return. It is only when a promise is made for something in return
from the promisee, that such promise can be enforced by law against the
promisor. This something in return is the consideration for the promise.
Definition of Consideration
Sir
Fredrick Pollock has defined consideration "as an act or forbearance of
one party, or the promise thereof is the price for which the promise of the
other is bought."
It is "some right, interest,
profit, or benefit accruing to one party or some forbearance, detriment, loss
or responsibility, given, suffered or undertaken by the other" (Currie v.
Misa (1875) L.R. 10 Ex. 153).
Section 2(d) of the Indian
Contract Act, 1872 defines consideration thus: "when
at
the desire of the promisor, the promisee or any other person has done or
abstained
from
doing, or does or abstains from doing, or promises to do or to abstain from
oing, something, such act or abstinence or promise is called a consideration
for the promise" .
The
fundamental principle that consideration is essential in every contract, is
laid down by both the definitions but there are some important points of
difference in respect of the nature and extent of consideration and parties to
it under the two systems of law:
(a)
Consideration at the desire of the promisor: Section 2(d) of the Act
begins with the statement that consideration must move at the desire or request
of the promisor. This means that whatever is done must have been done at the
desire of the promisor and not voluntarily or not at the desire of a third
party. If A rushes to B's help whose house is on fire, there is no
consideration but a voluntary act. But if A goes to B's help at B's request,
there is good consideration as B did not wish to do the act gratuitously.
(b)
Consideration may move from the promisee or any other person: In English
law, consideration must move from the promisee, so that a stranger to the
consideration cannot sue on the contract. A person seeking to enforce a simple
contract must prove in court that he himself has given the consideration in
return for the promise he is seeking to enforce.
In
Indian law, however, consideration may move from the promisee or any other
person, so that a stranger to the consideration may maintain a suit. In Chinnaya
v.Ra,maya (1882) 4 Mad. 137, a lady by a deed of gift made over
certain property to her daughter directing her to pay an annuity to the donor's
brother as had been done by the donor herself before she gifted the property.
On the same day, her daughter executed in writing in favour of the donor's
brother agreeing to pay the ~nnuity. Afterwards the donee (the daughter)
declined to fulfil her promise to pay her uncle saying that no consideration
had moved from him. The Court, however, held that the uncle could sue even
though no part of the consideration received by his niece moved from him. The
consideration from her mother was sufficient consideration.
Privity
of Contract
A
stranger to a contract cannot sue both under the English and Indian law for
want of privity of contract. The following illustration explains this point.
In Dunlop
Pneumatic Tyre Co. v. Selfridge Ltd. (1915) A.C. 847. D supplied
tyres to a wholesaler, X, on condition that any retailer to whom X re-supplied
the tyres should promise X, not to sell them to the public below D's list
price. X supplied tyres to S upon this condition, but nevertheless S sold the
tyres below the list price. Held: There was a contract between D and X
and a contract between X and S. Therefore, D could not obtain damages from S,
as D had not given any consideration for S's promise tc X nor was he party to
the contract between D and X.
Thus,
a person who is not a party to a contract cannot sue upon it even though the
contract is for his bC~Gfit. A, who is indebted to B, sells his property to C,
and C
he purchaser of the property, promises to payoff
the debt to B. In case C fails to pay B, B has no right to sue C for there is
no privity of contract between B and C.
The
leading English case on the point is Tweddle v. Atkinson (1861)
1 Band Section 393. In this case, the father of a boy and the father of a girl
who was to be married to the boy, agreed that each of them shall pay a sum of
money to the boy who was to take up the new responsibilities of married life.
After the demise of both the contracting parties, the boy (the husband) sued
the executors of his father-in-law upon the agreement between his father-in-law
and his father. Held: the suit was not maintainable as the boy was not a
party to the contract.
Exception
to the doctrine of privity of contract: Both the Indian law
and the English law recognize certain exceptions to the rule that a stranger to
a contract cannot sue on the contract. In the following cases, a person who is
not a party to a contract can enforce the contract:
(a) A beneficiary under an agreement to create a
trust can sue upon the agreement,
though
not a party to it, for the enforcement of the trust so as to get the trust
executed for his benefit. In Khawaja Muhammad v. Hussaini Begum, (1910)
32 All. 410, it was held that where a Mohammedan lady sued her father-in-law to
recover arrears of allowance payable to her by him under an agreement between
him and her own father in consideration of her marriage, she could enforce the
promise in her favour insofar as she was a benefi~iary under the agreement to
make a settlement in her favour, and she was claiming as beneficiary under such
settlement.
(ii)
An' assignee under an assignment made by the
parties, or by the operation of law (e.g. in case of death or insolvency), can
sue upon the contract for the enforcement of his rights, tittle and interest.
But a mere nominee (Le., the person for whose benefit another has insured his
own life) cannot sue on the policy because the nominee is not an assignee.
(iii) In
cases of family arrangements or settlements between male members of a Hindu
family which provide for the maintenance or expenses for marriages of female
members, the latter though not parties to the contract, possess an actual
beneficial right which place them in the position of beneficiaries under the
contract, and can therefore, sue.
(iv)
In case of acknowledgement of liability, e.g.,
where A receives money from B for paying to C, and admits to C the receipt of
that amount, then A constitutes himself as the agent of C.
(v)
Whenever the promisor is by his own conduct
estopped from denying his liability to perform the promise, the person who is
not a party to the contract can sue upon it to make the promisor liable.
(vi)
In cases where a person makes a promise to an
individual for the benefit of third party and creates a charge on certain
immovable propertyforthe purpose, the third party can enforce the promise
"though, he is stranger to the contract.
Kinds
of Consideration
Consideration
may be:
(a)
Executory or ,future which
means that it makes the form of promise to be performed in the future, e.g., an
engagement to marry someone; or
(b)
Executed or present in which it
is an act or forbearance made or suffered for a promise. In other words, the
act constituting consideration is wholly or completely performed, e.g., if A
pays today Rs. 100 to a shopkeeper for goods which are promised to be supplied the
next day, A has executed his consideration but the shopkeeper is giving
executory consideration - a promise to be executed the following day. If the
price is paid by the buyer and the goods are delivered by the seller at the
same time, consideration is executed by both the parties.
(c)
Past which means a past act or forbearance, that
is to say, an act constituting consideration which took place and is complete
(wholly executed) before the promise is made.
According
to English law, a consideration may be executory or executed but never past.
The English law is that past consideration is no consideration. The Indian
law recognizes all the above three kinds of consideration.
Rules Governing Consideration
(a)
Every simple contact must be supported by
valuable consideration otherwise it is formally void subject to some
exceptions.
(b)
Consideration may be an act of abstinence or
promise.
(c)
There must be mutuality Le., each party must do
or agree to do something. A gratuitous promise as in the case of subscription
for charity, is not enforceable. For example, where A promises to subscribe Rs.
5,000 for the repair of a temple, and then refuses to pay, no action can be
taken against him.
(d)
Consideration must be real, and not vague,
indefinite, or illusory, e;g., a son's promise to "stop being a
nuisance" to his father, being vague, is no consideration.
(e)
Although consideration must have some value, it
need not be adequate Le., a full return for the promise. Section 25
(Exp. II) clearly provides that "an agreement to which the consent
of the promisor is freely given is not void merely because the consideration is
inadequate." It is upon the parties to fix their own prices. For example,
where A voluntarily agreed to sell his motor car for Rs. 500 to S, it became a
valid contract despite the inadequancy of the consideration.
(f)
Consideration must be lawful, e.g., it must not
be some illegal act such as paying someone to commit a crime. If the
consideration is unlawful, the agreement is void.
(g)
Consideration must be something more than the
promisee is already bound to do for the promisor. Thus, an agreement to perform
an existing obligation
made
with the person to whom the obligation is already owed, is not made for
consideration. For example, if a seaman deserts his ship so breaking his contract
of service and is induced to return to his duty by the promise for extra wages,
he cannot later sue for the extra wages since he has only done what he had
already contracted for: Stilk v. Myrick (1809).
When Consideration' not Necessary
The
general rule is that an agreement made without consideration is void. But
Section 25 of the Indian Contract Act lays down certain exceptions which make a
promise without consideration valid and binding. Thus, an agreement without
consideration is valid:
1.
If it is expressed in writing and registered and
is made out of natural love and
affection
between parties standing in a near relation to each other; or
2.
If it is made to compensate a person who has
already done something
voluntarily for the promisor, or done something
which the promisor was legally
compellable
to do; or
3.
If it is a promise in writing and signed by the
person to be charged therewith,
or
by his agent, to pay a debt barred by the law of limitation.
4.
Besides, according to Section 185 of the Indian
Contract Act, consideration
is
not required to create an agency.
5.
In the case of gift actually made, no
consideration is necessary. There neednot be nearness of relation and even if
it is, there need not be any natural love and affection between them. .
The
requirements in the above exceptions are noteworthy. The first one requires
written and registered promise. The second may be oral or in writing and the
third must be in writing.
Illustrations
A, for natural love and affection,
promises to give his son B Rs. 10,000. A put his
promise
to 8 into writing and registered it. This is a contract.
A
registered agreement between a husband and his wife to pay his eamings to her
is a valid contract, as it is in writing, is registered, is between parties
standing in near relation, and is for love and affection (Poonoo Bibi v.
Fyaz Buksh, (1874) 15 80m LA. 57).
But
where a husband by a registered document, after referring to quarrels and
disagreement between himself and his wife, promised to pay his wife a sum of
money for her maintenance and separate residence, it was held that the promise
was unenforceable, as it was not made for love and affection (Rajluckhy Deb v.
Bhootnath (1900) 4 C.W.N. 488). .
Whether Gratuitous Promise can be
Enforced
A gratuitous promise to subscribe to a
charitable cause cannot be enforced, but if the promises is put to some
detriment as a result of his acting on the faith of the promisee and the
promisor knew the purpose and also knew that on the faith of the subscription
an obligation might be incurred, the promisor would be bound by promise (Kedar
Nath v. Gorie Mohan 64).
It
may be noted that it is not necessary that the promisor should benefit by the
consideration, it is sufficient if the promisee does some act from which a
third person is benefited and he would not have done that act but for the
promise of the promisor.
For
example, Y requests X for loan, who agrees to give loan to Y if S gives
guarantee of repayment of the loan. S gives such a guarantee of repayment by Y.
Thereupon X gives loan to Y. Here S will be promisor and X the promisee, but
from X's action, benefit is derived by Y and not by S. X would not have given
the loan to Y had S not given the guarantee of repayment of loan. Thus the
benefit conferred on Y by X at the request of S is a sufficient consideration
on the part of X as against the promise of S to replay the loan. Alternatively,
it may be said that the detriment which X suffered by giving loan to Y at the
request of S is sufficient consideration on the part of X in respect of the
promise of S to repay the loan.
Consideration
therefore, is some detriment to the promisee or some benefit to the promisor.
Detriment to one person and benefit to the other are the same things looked
from two angles. Ordinarily a promisor is not bound by his promise, unless some
consideration is offered by the promisee.
Terms
Must be Certain
It
follows from what has been explained in relation to offer, acceptance and
consideration that to be binding, an agreement must result in a contract. That
is to say, the parties must agree on the terms of their contract. They must
make their intentions clear in their contract. The Court will not enforce a
contract the terms of which are uncertain. Thus, an agreement to agree in the
future (a contract to make a contract) will not constitute a
binding contract e.g., a promise to pay an actress a salary to be "mutually
agreed between us" is not a contract since the salary is not yet
agreed: Loftus v. Roberts (1902).
Similarly,
where the terms of a final agreement are too vague, the contract will fail for
uncertainty. Hence, the terms must be definite or capable of being made
definite without further agreement of the parties.
The
legal maxim, therefore, is "a contract to contract is not a contract".
If you agree "subject to contract" or "subject to
agreement", the contract does not come into existence, for there is no
definite or unqualified acceptance.
Resume
Thus
a contract is always based upon:
(i)
Agreement (consensus ad item) an
unqualified acceptance of a definite offer;
(ii)
An intent to create legal obligations; and
(iii)
Consiideration.
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