An agreement which is a legally binding or enforceable by law is called a Contract. Dueto this, it can be seen that not all agreements are enforceable by law. For an agreementto be legally binding, several ingredients have to be there. These ingredients are:
: There should be two parties that have agreed to certain terms, theofferor and the offeree.
: The two parties to the contract must be willing to perform their dutiesunder the contract.
: The parties to he contract must have the legal capacity to perform or make good on their responsibilities under the contract.
: There has to be a price for the promise to be performed under thecontract. The consideration can, therefore, be in the form of interest, or a benefitto the promisor; or a loss, sufferance, detriment, etc. to the promisee; or both indue course of the contract performance. Consideration needs not be adequate.Nevertheless, it must be sufficient. In this respect, anything that has goteconomic value in the eye of the Law can be seen as to constitute sufficientconsideration for contract purposes
The parties must not be forced to enter into a contract; they mustact out of their own free will and not out of compulsion.
Not declared void by the Law of Contract Act
: All terms of the contract must belegal, and they must therefore abide by the Laws of the Country (in Tanzania, weare governed by the Law of Contract Act, 2002).
Offer and Acceptance:
These are two of the most vital elements of a contract.