The Basic Elements Of A Contract

1653 Words7 Pages
A contract is a written or spoken agreement between two or more parties that involves the exchange of two promises, which is intended to be enforceable by law. The four basic elements are the offer, consideration, acceptance, and mutuality. When elements are broken down individually, each one is just as important as the next. If one of these elements are broken or misunderstood, it could mean result in the contractual agreement becoming not valid and end in lawsuit. The overall purpose of the contract is for legal purpose and to keep a order within an agreement. The first element of a valid contract would have to be the offer. You can’t have an contract with a having something to offer to another partner. An offer is when one party…show more content…
The next step in contracting an agreement is to either accept the offer being put on the table or if the party does not agree then they enter a counteroffer. A counteroffer, is considered a non acceptance but, instead a response to an offer that modifies the original offer. Then the original offering party has the choice to accept, counteroffer back, or deny the offer which would mean the contract would be no more. If the offer is accepted, then the next step will be mutuality. Mutuality is the agreement of being a partnership with the offer that has been presented and accepted by both parties, along with the terms of the contract. When agreeing, thus both parties are legally bound to perform their side of the contract, if not they will be have broken their contract and are risking being sued. Contracts can be agreed upon by word and a handshake, but for a contract to hold up in court in certain states in must be in writing. The statute of limitations for oral contracts is four years. The statute of limitations for written contracts is six years. When contracts are broken and a party of the agreement decides to begin process of suing the other party of the contract, courts will be involved. When courts get involved, a contract is interpreted a certain way. When oral contracts are taken to court, the judge will take in information from both parties since their is no paper trail of what was agreed
Open Document