1. elements
1.1. offer - one of the parties made a promise to do / refrain from doing some specified action in the future
1.2. consideration - something of value was promised in exchange for the specified action / non-action
1.3. acceptance - acceptance may be expressed through words, deeds or performance as called for in the contract
1.4. mutuality - the contracting parties had “a meeting of the minds” regarding the agreement. This means the parties understood and agreed to the basic substance and terms of the contract
1.5. competency & capacity - natural person who enters a contract possesses complete legal capacity to be held liable for the duties he or she agrees to undertake
2. capacity
2.1. All parties must have the ability to understand the terms of and any obligations under the contract
2.2. Consent to the contract must be freely given (no coercion / force, fraud, under influence / misrepresentation)
2.3. If a person lacking capacity has entered into a contract, it will generally be up to that person to decide if they want to invalidate the contract
2.4. Categories that lack the capacity to enter into contracts:
2.4.1. A minor (children under 18):
2.4.2. unless the contract is for necessities / education
2.4.3. any contract made with a minor is automatically and immediately void but a contract made by a minor is voidable at the minor’s discretion
2.4.4. minors who choose to disavow their contracts entered may not be held liable for breach
2.4.5. Persons of unsound mind:
2.4.6. under the influence of drugs / alcohol
2.4.7. only if the condition affects the person's ability to understand the nature of the transaction
2.4.8. if the other party is aware of their incapacity
2.4.9. under the intoxication of prescription medication / mentally incompetent / insane
2.4.10. relieved from their contractual responsibilities more readily than others
3. consideration
3.1. Parties must exchange some value for a contract to be binding
3.2. It does not have to be adequate / for the benefit of the other person, it merely has to be sufficient
3.3. 2 types of consideration:
3.3.1. bilateral contract - involves exchanging a promise for a promise
3.3.2. unilateral contract - involves one party making a promise and the other party doing something in return
3.4. EXAMPLE:
3.4.1. Abu offers to sell his car for nothing - no consideration
3.4.2. Abu offer to sell it for RM 300 - valid consideration
3.5. Insufficient consideration include:
3.5.1. an existing public duty
3.5.1.1. police officer - duty to protect the public
3.5.1.2. contractual duty - the production of services already required by another contract
3.5.2. something with sentimental value only
3.5.3. something that occurred before the contract - consideration must move from the contract
3.5.3.1. a ring received in January cannot be consideration for a contract entered into in October
3.5.4. anything illegal
4. certainty
4.1. D: being free from any doubt, a state of being absolutely certain
4.2. In terms of contract law, a contract is certain when the provisions are properly described and explained and clearly set forth
4.3. EXAMPLE:
4.3.1. if the guest wants to stay in a hotel, the guest needs to inform how many days and the type of room the guest need