Requirements for a valid contract
In order to have a valid contract you must inter alia meet the following 6 formalities/requirements:
- Consensus / Agreement
The Parties must reach agreement on the terms and conditions. Both parties must intend to enter into the contract - Legal Capacity
The parties must have the legal capacity/authority to enter into an agreement - Certainty
Terms must be sufficiently clear and certain - Possibility to Perform
The performance undertaken must be objectively possible at the time of conclusion - Formalities
Alienation of Land Act 68 of 1981 – Section 2(1) - Legality
Agreement cannot be contrary to public policy i.e. contra bones mores / Constitution / Common Law (Statutory Illegality / Common Law Illegality)
THEREFORE:
To conclude an enforceable contract there must be:
- Compliance with the requirements as set out above; and
- Offer and Acceptance
Consequences of Fulfillment = Valid Contract
Consequences of Non-Fulfillment = No Valid Agreement comes into existence, any performance to be returned and neither party has any claim for damages