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Capacity- Section 11 of the act states that if any person who reach the majority age stated by law under which he falls, person of sound mind, and any person who is not disqualified from law is considered as competent person. In other words, any person who is of minor age, unsound mind, and disqualified from any law is not considered as capable to enter into contract (contract Act, 1950).

Intention- the next and important element of valid contract is intention. For legal enforcement of contract intention of parties to enter into contract must be present. For deciding any case, Court first consider the presence of intention. Contract is legally binding on parties only if partiesintend to enter into contract. Malaysian contract law is silent on this element, and refer to English law for the purpose of determining intention of parties.

Certainty- it is necessary for the contract to be binding that terms and provisions stated in the contract must be clear and easily understood by the parties. In case agreement is not certain then it is not legally binding on the parties. For example, in case if any person wants to stay in hotel then it is necessary that he states the number of days he want to stay in hotel, type of room, and also date on which he arrived in the hotel.

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