A valid contract is a legally binding agreement between two or more parties that creates certain rights and obligations. In order for a contract to be considered valid, it must contain certain essential elements. These elements are:
Offer and acceptance: A contract must involve an offer made by one party and acceptance of that offer by the other party. The offer must be clear and definite, and the acceptance must be unconditional and communicated to the offeror.
Consideration: Each party must provide something of value, known as consideration, in exchange for the other party's promise. This can be a payment, a service, or a promise to do or not do something.
Mutual agreement: Both parties must agree to the terms of the contract and understand their obligations under the agreement.
Legal capacity: Both parties must be legally capable of entering into a contract, which means they must be of legal age and have the mental capacity to understand the terms of the contract.
Lawful purpose: The purpose of the contract must be legal and not against public policy.
Writing: While it is not always necessary for a contract to be in writing, certain types of contracts, such as those involving real estate or contracts that cannot be performed within one year, must be in writing to be enforceable.
Cases can be used to illustrate the essential elements of a valid contract. For example, in the case of Carlill v. Carbolic Smoke Ball Co., the court found that the company had made a clear and definite offer to pay a reward to anyone who used their product and contracted the flu, and the plaintiff, Mrs. Carlill, had accepted the offer by purchasing and using the product. The court also found that there was consideration, as Mrs. Carlill had paid for the product and the company had promised to pay a reward. The court held that a valid contract had been formed, and Mrs. Carlill was entitled to the reward.
Another example is the case of Raffles v. Wichelhaus, in which the court found that there was no valid contract because there was no mutual agreement between the parties. In this case, the defendant had agreed to purchase cotton from the plaintiff, but there was confusion over whether the cotton was from the current crop or the following year's crop. The court found that there was no mutual agreement because the parties had a different understanding of the terms of the contract, and therefore, no valid contract was formed.
In conclusion, a valid contract must contain certain essential elements, including offer and acceptance, consideration, mutual agreement, legal capacity, a lawful purpose, and, in some cases, a written document. Cases can be used to illustrate how these elements are applied in real-world situations.