Contract

Contracts

Kelly Wallace

BUSN150-1005A-10

What is a contract? A contract is suppose to be a legally binding agreement between 2 or more parties (Barret, M n.d.). There are four elements that a contract has to have to be consider valid. The first element a contract has to have is mutual assent, which means all parties voluntary have to agree to enter into a contract with one another (Barret, M n.d.). So the first element is that everyone involved has to want to enter into a contract with one another of his or her own freewill . The second element is that all parties must be at least eighteen years of age and be of sound mind and understand what they are signing and that is called being competent (Struck, J n.d.). All parties have to be of legal age to enter into a contract and neither party’s mental state can be in question when entering into a contract for it to be considered valid. Another element is consideration, which means each party must receive something of value from the other party(Barret, M n.d.). What that means is for a contract to be considering valid both parties entering into the contract must be getting something of value out of the deal they are making. The last element of a valid contract is that it has to be lawful and created for a legal purpose (Struck, J n.d.) The last and most important element of a valid contract is if a contract breaks any laws and is created for illegal purpose it is then not valid and non binding.

Contracts intent is to establish an agreement written or oral between two or more parties, on a particular subject (Struck, J n.d.). Also for a contract to be valid it has to include all four elements. In the matter of John D.R. Leonard vs. Pepsi Co. the contract is not valid because the contract was not entered into by both parties voluntary. When Mr. Leonard sent his Pepsi Co. his order form, not listing the jet as an item to order, his 15 points and his $700,000.00 check and Pepsi Co in return...