BUS 670 Legal Environment
Instructor: Mark Cohen
Essential elements of Contracts
All contracts share some common elements. A contract starts when an offer is made, certain requirements need to be satisfied to ensure the agreement is legal, in particular a capacity of parties to contract has to be proven, the legal purpose of the agreement and the satisfaction of consideration, before the offer is accepted.
Contracts have common elements in their construction. A non-exhaustive list would include the following: * Contracts must be voluntary
* Usually written but can be oral as well
* Contracts can be expressed or implied
* A contract does not need an agreement between two parties to be binding it can be unilateral * Likely it involves negotiation
* Contracts stipulate an agreement between two or more parties. * Contracts require the satisfaction of proving the capacity of the parties to enter into a contract. * Contracts must also be legal in that they have a legal purpose.
Some of the most salient of elements in a contract usually involve an Offer, Acceptance and Consideration. A. Offer—the act or an instance of presenting something for acceptance. The promise to do or refrain from doing some specified thing in the future; a display of willingness to enter into a contract on specified terms, made in a way that would lead to a reasonable person to understand that an acceptance, having been sought, will result in a binding contract. Reed, Shedd, Morehead & Corley (2005) state ‘An Offer is necessary to create a valid, enforceable contract’. The offer marks the beginning of the process that will culminate in a contract. Some contracts are deemed to be unenforceable or avoidable. In cases such as “Fraud, mistake, illegality, impossibility or frustration of purpose, the court will usually allow a suit be brought to recover either the value of the services performed...