When is a contract valid and enforceable? An overview of consent, subject matter and cause, and the consequences of invalidity or rescission.
Essential elements
Under Jordanian civil law, a contract is formed when two parties agree to create a legal effect. Its essential elements are consent, subject matter and lawful cause. If an essential element is absent, the agreement may be absolutely void.
Consent must be given by a person with legal capacity and be free from mistake, fraud, duress and exploitation. A defect in consent may make the contract voidable at the request of the affected party.
Subject matter and cause
The subject matter must exist or be capable of existing, be defined or capable of definition, and be lawful. The direct purpose pursued by the parties must also be genuine and lawful.
Consequences of invalidity
Invalidity generally restores the parties to their pre-contract position. Where restitution is impossible, equivalent compensation may be ordered. Any interested person may invoke absolute invalidity, and the court may raise it on its own motion.
Legal review before signing is particularly important for real-estate and long-term commercial agreements.
This article is for general information only and does not constitute legal advice for any specific matter.
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