Contract Law Fundamentals

How do contracts function? When you sign them, what happens? What must be included in a contract in order for it to be enforced? Find out more here.

What you’ll discover:

What Exactly Is a Contract?
Additional Crucial Contract Components The Finer Points

Contracts are among the most prevalent legal instruments in our personal and professional life. A contract will be encountered whether you are purchasing a mobile phone, seeking for landscaping services, or beginning a company. As a consequence, learning the fundamentals of contract law is a good idea.

What Exactly Is a Contract?

A contract is a legally binding agreement between two people to accomplish something (or to not do something).

Some aspects must be included in any valid contract. First and foremost, it must include an offer. The offer specifies what someone will do, such as lease you a tractor, sell you a guitar, paint your home, or just pay you.

The offer must then be accepted. Acceptance implies that you agree to the terms as they are. (If you modify the offer, it is usually called a “counter-offer,” which must also be accepted.)

Finally, it must demonstrate both parties’ desire to engage into a legally enforceable agreement. In other words, both parties must be aware that the agreement may be legally enforced.

Lastly, it must be considerate. Consideration” refers to anything of worth, generally money, that is negotiated for in return for the product or service being supplied.

The parties must be competent to engage into this agreement and must have done so willingly. These agreements may be oral, but their enforceability improves when they are in writing. If the agreement is oral, it is still enforceable, but you must first show that it existed, which might be difficult at times.

Additional Key Contract Components

Each contract will include what are known as provisions or conditions. These are the terms of the agreement, including who, what, how much, and when.

As previously stated, a person must be mature and mentally capable in order to engage into a contract. A person may engage into a contract on behalf of another person (agency), but only with their consent.

The Finer Details

In addition to these fundamentals of contract law, there are other fine matters to consider. You may construct contracts for goods or services, as well as other service-related materials,. Whenever you are involved in a complicated transaction or a contract involving a substantial sum of money, you should consult with a lawyer to safeguard your interests.