Under the law of contracts one party makes an offer and the other accepts the offer as a part of making a contract. This is called the agreement. Sometimes, when the first party makes an offer, the second party will not accept it but makes a counter offer. The first party can then accept the counter offer or reject it and propose another counter-offer. Eventually this Requirement of a contract will be fulfilled.Consideration : For a contract to be binding there must be some form of consideration (something of value) given in exchange by the buyer to the seller. Money is the most common form of consideration given.Consensus ad idem : Both parties to a contract should agree to the same thing in the same sense. the consent must arise out of common intention. There will be no consensus if either of the parties or both of them are under an erroneous impression as to some circumstances affecting the contract.Capacity of the parties : Both the parties should be legally competent to enter into the contract. Mentally unsound persons, minors, etc are generally deemed incapable of entering into a contract.Legality of the Contract : The object of a contract must be legal for trade before a contract is enforceable. In other words if two parties agree to an illegal transaction and one party fails to live up the agreement, the second party could not receive help from the courts to enforce the contract since the transaction was illegal.Insurance Contract, Parts : There are five basic parts to an insurance policy contract. The first four are referred to as the “D-I-C-E” provisions. They are the followings: