Prepare a two to three page paper, following the APA guidelines, detailing the essential elements of a contract…….
Find law Legal Dictionary (2011) defines a contract as “a legally enforceable agreement between two or more parties, where parties could be individuals or businesses, which is created when both parties in the agreement assume a legal duty.” (para. 1) According to Bays (1920), for the contract to be legally enforceable it needs to have at least four main elements namely competent persons, an offer, acceptance and legal consideration. (p. 68) If any of this is missing then the contract is null and void. In this paper we look into each of these elements in detail.
According to Ollek (2011), an offer is a statement or any other indication that one party is prepared to enter into a legal contract with another party if certain terms are met. It is the willingness to enter into a bargain with another person with an aim of understanding the other party. The goal is to eventually agree and enter into a contract which can be enforced in a court of law. It must be stated in such a manner that the person receiving it can accept it without making any alteration to it. The person making an offer is called the offerer while the person to whom the offer is made is called the offeree. It is important to distinguish between an offer and an invitation to treat. An invitation to treat calls upon other people to make an offer or to consider offers and usually forms the foundation of negotiations. It differs significantly from an offer in the sense that it is not enforceable in law. Some good examples of invitation to treat are catalogues, newspaper advertisements and lists of prices.
Once an offer is made, the person it is offered to will either accept the offer or do otherwise. Acceptance of an offer is an expression of the willingness to assent to the terms made in the offer without changing the said terms. An offer can only be accepted in the manner in which it is offered. Should the party feel that the terms are unacceptable and suggests or adds new terms, then this is called a counter offer. A counter offer could be accepted or rejected depending on the negotiations that take place. According to Brantley (1912), many offers and counter offers can be made, but the endpoint is what really matters. If the parties agree to the terms then they are ready to enter into an agreement. (p. 9) An offer can be accepted in writing, verbally or assumed based on an action which depicts acceptance. Most offers have a time limit within which they must be accepted. In such a scenario it must be accepted before it expires. An expired offer can however be renewed. Open offers are usually taken in law to have a reasonable period of time during which they must be accepted. The prevailing circumstances in each case determine what a reasonable duration is.
The intention of legal consequences is a declaration to enter into an agreement that is legally binding and one which can be enforced by law. It does not have to be directly stated in the contract. In most cases it is usually presumed. However, should the parties agree to not to be legally bound, then this must be stated in the contract without exemption.
According to “Legal Elements of a Contract “ (2011), “a consideration is a promise to do something in return for what the other party will do for you. A consideration has to be something valuable, which could range from profit, interest, ownership of copyrights or any other benefit that is agreed upon. It is compensation to one party for bearing a burden, loss or responsibility.” It is upon the parties to decide whether the consideration is sufficient, and for this the law requires something valuable to be given as consideration. For it to be binding, the agreement has to be a new promise or fresh benefits which had not been agreed upon in past transactions. Though in most cases the consideration is monetary, it needs not be. It could even be a promise to refrain from carrying out some activities.
In addition, both parties must have the capacity and the authority to enter into a contract. They must be competent enough. Thus a contract entered into with a mentally ill person or a minor may not be legally enforceable.
In conclusion we have seen that there are basic elements for a contract to be legally binding. An offer, acceptance of the offer and a consideration are the minimum elements required to enforce a contract.
Bays A. (1920). American Commercial Law Series. General law of Contracts (2nd ed.) (p. 68). Chicago.
Brantley W. (1912). Law of Contract (2nd ed.) (p.9). Baltimore, Maryland.
Find Law. (2012). Legal Dictionary: Contracts Law. Retrieved February 6, 2012 from http://public.findlaw.com/library/pa-contracts-law.html
Legal Elements of a Contract. (2011). Retrieved February 6, 2012 from http://www.window.state.tx.us/procurement/pub/contractguide/LegalElementsofaContract.pdf
Ollek S. (2012). Essentials of a Contract. Retrieved February 6, 2012 from http://www.e-law.bc.ca/art_essential.html
Place your order now………..