---
title: "Contract and its essential elements"
subject: "Engineering Professional Practice"
chapter: 4
key: "semester_8/engineering_professional_practice:contract-valid-essential-elements"
source: https://www.bctengineer.com/q/semester_8/engineering_professional_practice/contract-valid-essential-elements
site: BCT Engineering
---

# Contract and its essential elements

Engineering Professional Practice · Chapter 4: Contract Management

- Asked in: 2074 Bhadra, 5 marks; 2071 Bhadra, 4 marks (asked 2 times)
- Video: [Elements of a Contract](https://www.youtube.com/watch?v=6QWZXl-qWos) — David Jaroszewski
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_8/engineering_professional_practice/contract-valid-essential-elements
- Whole chapter: https://www.bctengineer.com/md/semester_8/engineering_professional_practice/chapter-4

## Question

Define Contract. What are the essential elements in a valid contract? (Describe briefly the elements of contract.)

## Short answer

A contract is a legally enforceable agreement creating rights and duties. Essential elements are offer and acceptance, intention to create legal relations, lawful consideration, competent parties, free consent, lawful object, certainty and possibility of performance, and legal formalities. Missing any element makes it void or voidable.

## Answer

A **contract** is a legally enforceable agreement between two or more parties to do, or not to do, something, creating rights and duties. In Nepal it is governed by the Muluki Civil Code 2074 (earlier by the Contract Act 2056).

#### Essential elements of a valid contract
1. **Offer and acceptance:** one party makes a clear proposal and the other accepts it unconditionally (a "meeting of minds").
2. **Intention to create legal relations:** the parties mean to be legally bound (social promises are not contracts).
3. **Lawful consideration:** something of value exchanged (payment, work, promise), and it must be lawful.
4. **Competent parties:** parties must be of legal age (18 years), of sound mind and not disqualified by law.
5. **Free consent:** no coercion, fraud, undue influence, misrepresentation or mistake.
6. **Lawful object:** the purpose must not be illegal, immoral or against public policy.
7. **Certainty and possibility of performance:** terms must be clear and capable of being done.
8. **Legal formalities:** writing, signing, registration or stamp where the law requires, for example for sale of land or construction contracts above a limit in public works.

If one of these is missing, the contract is void or voidable.

**Example:** A district office accepts the bid of a contractor to build a bridge for Rs. 5 crore in 12 months. There is offer (bid), acceptance (letter of acceptance), consideration (price), competent parties, and lawful object.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. A contract is:
   A. Any social promise
   B. A unilateral wish
   C. A legally enforceable agreement creating rights and duties
   D. A government notice
   Answer: C. Social promises are not contracts. (Key point: Contract definition)

2. Competent parties must be:
   A. Over 25 years
   B. Registered engineers
   C. Of the same nationality
   D. Of legal age (18), sound mind and not disqualified by law
   Answer: D. Age 18 and sound mind are required. (Key point: Competent parties)

3. If an essential element is missing, the contract is:
   A. Void or voidable
   B. Fully valid
   C. Valid but with penalty
   D. Valid only for the client
   Answer: A. Missing elements affect enforceability. (Key point: Missing element)

## Related in Engineering Professional Practice

- [Contract, tendering process, agreement](https://www.bctengineer.com/question.md?key=semester_8%2Fengineering_professional_practice%3Acontract-tendering-agreement-elements) — Engineering Professional Practice, chapter 4
- [Void vs voidable contract; general conditions](https://www.bctengineer.com/question.md?key=semester_8%2Fengineering_professional_practice%3Avoid-voidable-general-conditions) — Engineering Professional Practice, chapter 4

## Related in other subjects

- [Contract, essential elements and importance](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Acontract-elements-importance) — Construction Management, chapter 5