What constitute a Valid Contract?

Thomas Sim PEA2066

Q.
What constitute a Valid Contract?

A.
Refer to What constitute a Voidable Contract? here.
Also see Valid, Void and Voidable Contracts here.

According to Section 10 (1) of Contracts Act 1950, a Valid Contract is an agreement enforceable by law and formed by 4 key elements:

  1. Free Consent
  2. Competence parties (Age of majority and of Sound Mind)
  3. Lawful Objects and Lawful Considerations
  4. Not expressly declared Void
S.10 (2) further states that there is no need to be written, witnessed or registered as a document.

Section 11 further states who are competent to contract, which specifies Competence to contract:

1. Age of Majority is 18 years or more;
2. Sound Mind is further explained in Section 12(1); and
3. Not disqualified to contract by law.

S.12 What is a sound mind for the purpose of contracting.
(1) A person is said to be of sound mind for the purpose of making a contract if, at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interests.
Below are extracts from Contracts Act 1950.

S.2 (h) An agreement ENFORCEABLE by law is a contract. Furthermore,

Section 10 What agreements are contracts
(1) 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 not hereby expressly declared to be void.

(2) Nothing herein contained shall affect any law by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents.

 
Ref:
S.2 (h), S.10 and S.11 of Contracts Act 1950