A contract has been defined as ‘an agreement between two or more parties that is intended to be legally binding’. There are three important components in a contract under the common law: offer and acceptance, consideration, and an intention to create legal relations. An agreement is the first requisite of any contract which consists of an offer and acceptance. When an expression of willingness to contract is made, it is called an offer. An offer becomes binding upon the offeror once as it is accepted by the offeree. An "invitation to treat" is different from a genuine offer. In an "invitation to treat", a party merely invites offers and is free to accept or reject such offers. The general rule requires that an acceptance must be communicated to the offeror and the offer may also specify that acceptance must reach the offeror. The offer ends in itself if the offeree rejects the offer. Until it is accepted, the offer may be revoked at any time by the offeror and the revocation must be communicated to the offeree. A contract may mean to describe a series of promises or acts constituting the contract, the document or documents constituting or evidencing that series of promises or acts, or their performance and the legal relations resulting from that series. There are three classes of contracts, namely, Simple contracts, Bilateral Contracts, Contracts by Deed and Unilateral contracts. Succinctly, the substantive elements of a valid and enforceable contract requires that –
There must be an offer and acceptance, which is in fact the agreement.
There must be an intention to create legal relations.
There is a requirement of written formalities in some cases.
There must be consideration (unless the agreement is by Deed).
The parties must have capacity to contract.
There must be genuineness of consent by the parties to the terms of the contract.
The contract must not be contrary to public policy.
