Besides an agreement, or meeting of the minds, a contract must have competent parties, a legal valuable consideration, and a lawful object. These are often called the elements of a contract.
8. Parties to a Contract. A contract must have at least two competent parties. Each party to a contract may consist of one or more persons.
To be competent to make a contract, a party must be of legal age. Legal age is twenty-one years for males, and ordinarily, eighteen for females. Legal age is fixed by statutes of the different states. These statutes differ somewhat as to the legal age of females. Some fix it at twenty-one, others at eighteen, and some even younger than eighteen, in case of marriage. Intoxicated persons, insane persons and idiots are not competent to make contracts. Artificial persons or corporations can make contracts within the scope of the powers given them by the state.
A person who does not voluntarily consent to the terms of a contract is not a party to it. Where fraud or duress is used in obtaining a party's consent to a contract, the contract is at least voidable. It is not enforceable if the defrauded party objects on that ground.
9. Consideration. Consideration may be good or valuable. Good consideration consists of love and affection existing between near relations. Good consideration is a sufficient consideration to support a deed given by one relative to another. But this is the only kind of contract supported by a good consideration.
Valuable consideration has been defined to consist of some right, interest, profit or benefit, accruing to the promisor, or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the party, to whom the promise is given. In short it is a benefit to the promisor, or a detriment to the promisee. All contracts, with the exception of sealed instruments, must be supported by a valuable consideration. Sealed instruments, except where abrogated by statute, import a consideration.
A promises to sell his watch to B for ten dollars. B accepts the offer by offering to pay A ten dollars. There is a valuable consideration, consisting of B's promise to pay A ten dollars.
A promises B two dollars if B will guard A's house for two hours. There may be no actual benefit resulting to A, since it may have been unnecessary to have the house guarded. But if B guards the house for two hours, A is legally bound to pay him the contract price of two dollars. The valuable consideration is the detriment or responsibility of B in guarding the house for two hours.
Mutual promises constitute a valuable consideration. If A promises B two dollars if B will work for him next Thursday, and B promises A to work for him next Thursday, the contract is mutual, and is supported by a valuable consideration. The consideration consists of the promise on the part of each of the contracting parties.
A past consideration will not support a contract. By a past consideration, is meant a benefit received in the past, for which no legal liability was incurred or exists. A gives B, his son, five hundred dollars. One year later, in consideration of the past gift, B promises to construct a dam for A. The consideration is past and does not support the attempted contract.