Elements of a Legal and Valid Contract
A contract is an agreement, but a different kind of agreement by virtue of the fact that it is legally binding and enforceable by law. Therefore, a contract is a legally binding agreement or promise made between two or more parties and if it does not materialize a court may step in to enforce the promise. The use of contracts is an integral and important part of life especially; in the business industry. If there were no contracts it would be difficult to conduct any business because people would not rely on other peoples promises because any party could easily pull out at any time during the deal, because of lack of commitment (Walston-Dunham, 2008).
In order for a contract to be termed valid and legal, it has to have some few elements that make it worth being termed as a contract. Firstly, there is a need for an offer to be made from one party or parties to another party or parties. The offer is at times referred to as a proposal. The proposal shows one partys willingness to abstain or do something presented to the other party with an expression of interest to obtain assent on the same (Walston-Dunham, 2008).
If the party receiving the proposal assents to the stipulations of the proposal then an acceptance is reached. Acceptance is necessary for the contract to be validated, and it means that the party receiving the proposal as accepted to be part to the contract and this means s/he has accepted the stipulations of the contract. Once the proposal made is accepted then proposal made becomes a promise (Anonymous, 2010).
A consideration is also an essential part of a contract. A consideration constitutes the things of value that the parties to a contract exchange in return for what they receive (promise). These things could be anything valuable such as goods, money or services. Thus a contract must have two parts, which are the consideration and promise-and one is offered as an exchange for the other. A contract of agreement lacking a consideration is termed as being null and void. As an example, if John decides to sell his car to James at a price of 1000$ dollars, then Johns offer (the car) to James is a promise to sell the car at 1000$ which James consideration. In a similar way James promise to purchase the car at 1000$ is a promise for a consideration of the car (Walston-Dunham, 2008).
Other important elements of valid and legal contracts include the competency and capacity of the contracts parties to enter in to contract. For a person to be competent in contracting there is a need for the person to be of an age set by the legal authorities as the lowest threshold of contracting age. The person also needs to be of sound mind and s/he should not be under any disqualification to engage in any contracting activity by laws and rules that may bind him (Anonymous, 2010).
Free consent is also an essential part of contracting no person should be forced into getting into any contract without his or her free consent. A person should accept to enter into a contract through his or her own volition. This is essential in ensuring that all parties agree on the same things in a sense that is common to both of them. Consent is only attainable if the parties agree upon a common thing presented in a sense that is understood by both parties in the same way or sense. Consent is however, not sufficient if there were cases of mistakes, misrepresentation, coercion, fraud and undue influence (Anonymous, 2010).
A contract must also be enforceable by law in order for it to be declared legally binding. Legal redress through courts should be possible for a contract to be legal and valid. This can be done through writing and registering the contract if the law stipulates so (Anonymous, 2010).
Anonymous (2010),. Essential elements of a valid contract, retrieved on 12th February, 2011 from http://www.scribd.com/doc/16514116/Essential-Elements-of-a-Valid-Contract
Walston-Dunham, B. (2008),.Introduction to Law, 5th edition, Cengage Learning Publishers
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