Essential characteristics of a valid contract:
1. Offer and acceptance – two parties, one making the offer and other accepting it – offer must be definite – acceptance must be absolute and unconditional – acceptance must be communicated to the offeror.
Balfour v Balfour – husband promises to pay household allowance to wife – separated – wife sues for allowance – domestic agreement – no contract.
3. Lawful consideration - both parties give and get something in return – no consideration, no contract - consideration may be past, present or future – in cash or in kind – must be real and lawful.
6. Lawful object – object must not be illegal, immoral or opposed to public policy – if any legal flaw, not enforceable by law.
7. Agreement not declared void – must not have been declared void by any law in force.
8. Certainty and possibility of performance – terms must be certain and not vague – not possible to ascertain the meaning, it cannot be enforced – must be capable of being performed – agreement to do impossible act, no contract.
Example: (a) A agrees to sell“100 bales of cloth” to B. There is nothing to indicate. Scammel v Ouston – purchase of motor van on hire purchase – hire purchase price payable over two years - no rate of interest or mode of payment indicated – Held, the word ‘hire purchase’ has not been precisely defined – no contract.