Essential Elements Contract

Essentials of a Contract:

Our whole economy is based on the freedom of individuals to contract and a system of laws that enforces contracts freely entered into. But a lot of people may not be aware of what are the essential elements required to make an enforceable contract. Recently I was asked if a contract not in writing is binding. We are so accustomed to seeing contracts in writing that many people assume that a contract must be in writing (and lengthy) before it is enforceable.

Agreement is essential to any contract. Before there can be a contract, there must be a consensus ad idem: that is, there must be a meeting of the minds. The two sides to a contract, whether for the construction of the liner Queen Elizabeth or for having your lawn cut, must agree on the fundamental terms of the contract. There must be an intention to enter into a legally binding contract. Whether the parties have reached an agreement is determined by an objective standard. What each party believes the other to be agreeing to will not be the determining factor. Rather, would an objective bystander, acting reasonably, looking at all of the facts relevant to the question concludes that the parties had come to an agreement on the essential terms of the contract with the intent to form a legally binding relationship? If so, there is a contract between the parties.

Essential Elements of Contract:

The essential elements of a contract are offer, acceptance, legal consideration, etc. The offer should express the willingness to enter a contract. These essential elements are explained below_

Offer:

The offer has to express the willingness of a party to enter a bargain or a contract. The offer usually has a date until it is valid. However, if the date is not present, then it is valid until accepted or rejected. Once rejected, the offer is not valid any more. So if a party offers a house for sale and another party rejects the offer because the price seems too high, then the...