Simply put, a contract is an agreement which the law would recognize and enforce. The key word is agreement. Every contract involves an agreement. However, it is not every agreement that qualifies as an enforceable contract. For there to be an enforceable contract, some key features must be in place.
First, there must be an offer, which is a promise made by one party to the other party with the intention that it shall become binding on the maker once it is accepted by the other party. An offer must be distinguished from a mere invitation to treat. A vacancy advertisement, for example, is not an offer but an invitation to treat. What constitutes offer is the letter of application written in response to the vacancy.
Secondly, there must be an acceptance. This is a total assent to the terms of an offer. Any modification of the offer is no longer an acceptance but a counter offer, which is open to further acceptance or rejection. For example, where A applies for the position of an Administrative Officer in B company as advertised by B, and B offers him a job as a Security Officer instead, what B has made is a counter offer and not an acceptance of A’s application which is the initial offer. It is then left for A to accept the counter offer or reject it, and until he accepts the counter offer, there is no binding contract.
Thirdly, there must be consideration. This is the value, whether in money or otherwise given or given up in exchange for the offer. The law is that a party who has not furnished consideration in a contract cannot sue to enforce it, except the contract is under seal or made by deed. A contract is under seal when it is printed in the standard format and signed, sealed and delivered by the parties. Where A and B agree for A to supply 10 bags of cement to B, if A fails to supply as agreed, B cannot sue him for breach of contract except B had given value(consideration) pursuant to the agreement. This can be by way of payment of money or other forms of commitment. B can however sue for breach of contract if the agreement was made under seal or by deed.
Mere promises not backed by consideration are called gratuitous promises. They are generally unenforceable. Thus a promise by a kind family friend to give me one million naira in a month’s time does not translate to a contract between us. It is unenforceable for the reason that I did not furnish consideration for the promise.Where the key ingredients of a binding contract as discussed above are lacking in any agreement, such cannot be regarded as a binding contract in law, neither can it be enforced in court.