What Are Formalities of a Contract

Contracts are an essential part of any business or legal agreement. They outline the terms and conditions of the agreement between two or more parties and provide a legal framework for the transaction. However, contracts are not just a simple agreement between two parties. There are several formalities that must be followed to ensure the validity of the contract.

Here are the formalities of a contract that you must consider:

Offer and Acceptance

The first formality of a contract is the offer and acceptance. It means that one party makes an offer to the other party, and that offer is accepted. The offer must be clear and unambiguous, and the acceptance must be communicated to the other party without any conditions or modifications.


Consideration is a crucial element of the contract. It means that each party must receive something of value in exchange for the agreement. Consideration can be anything of value, such as money, goods, services, or promises.

Intention to Create Legal Relations

For a contract to be valid, it must have an intention to create legal relations between the parties. It means that both parties must understand the legal consequences of the agreement they are entering into. If one party believes that the contract is not legally binding, it will not be considered a valid contract.


Capacity refers to the legal ability of the parties to enter into a contract. For example, minors or individuals who are not of sound mind cannot enter into a binding agreement. Therefore, it is essential to ensure that both parties have the legal capacity to enter into the contract.

Free Consent

Free consent means that both parties must enter into the agreement willingly and without any coercion or undue influence. If one party is pressuring the other party to enter into the contract, it will not be considered a valid agreement.


Finally, the contract must not be illegal or against public policy. For example, a contract to commit a crime or to promote discrimination would not be considered valid.

In conclusion, contracts are essential for any business or legal agreement. It is crucial to follow the formalities of a contract to ensure that it is legally binding and enforceable. The offer and acceptance, consideration, intention to create legal relations, capacity, free consent, and legality are the formalities that must be considered when drafting and signing a valid contract.