Elements To Form A Legally Enforceable Contract – Coursework Example
Elements of a Legally Enforceable Contract Elements of a Legally Enforceable Contract A legally binding contract has six major elements: the offer and acceptance, legal purpose, mutual obligation, certainty of subject matter, consideration, and competent parties (Liuzzo, 2013). This paper focuses on a comprehensive explanation of each part of these elements that make a contract legally binding. First, the offer is a demonstration of the readiness to enter a bargain so established to justify another person in knowing that his agreement to the contract is welcome and will conclude is. On the contrary, acceptance occurs in a number of ways. It is an indication of assent to the terms thereof provided by the offered in a manner deemed by the offer. An acceptance should not alter the terms of the offer.
The terms of the agreement should be for legal purpose. A good example is a contract for illegal distribution of drugs cannot be enforceable since the purpose of its existence is not legal. Mutual obligation for an enforceable contract focuses on the meeting of the minds. The two parties mutually understand and agree to the terms of the contract. The terms should be clear to all parties signing the contract (Liuzzo, 2013).
Similarly, an enforceable contract should hold the certainty of subject matter. It implies that an agreement is enforceable only if the terms provide sufficient definition that enables the court to understand the responsibilities of the parties (Miller & Cross, 2011). Any valid contract should have consideration. Consideration comprises of either a benefit to the promisor or a loss to the promise. A court of law should ascertain that parties under the contract are competent and authenticated to function within the contract.
Liuzzo, A. (2013). Essentials of business law (8th Ed.). New York: McGraw-Hill.
Miller, R., & Cross, F. (2011). The legal environment of business. Mason, Ohio: South-Western.