A contract, to be valid in a business context, must have some essential elements which can be basically classified in four major categories Agreement - In every contract, there must be an agreement between two parties where one party needs to make any kind of valid offer & the other party needs to accept the offer made. Consideration - To be valid, every contracts must have some consideration on the basis of which they engage in the contract. There must be exchange of something. The subject matter of the contract may vary from contract to contract. Intention to Create Legal Relationship - The subject matter & everything related to the contract must be legal & there should be a lawful purpose between the parties. For instance, a hire B for 500 pound to kill C & this is not a valid contract because of unlawful purpose. Capacity of the Parties Involved - Each party in the contract must be capable of involving into the contract. Infants & mentally disorder persons are not legally allowed to engage in contract.
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