Elements That Constitute A Legally Binding Contract - 1100 Words

Elements That Constitute A Legally Binding Contract (Essay Sample) Content: Elements of a ContractNameInstitutionProfessorDateElements of a ContractA contract is an arrangement that two or more parties voluntarily agree to and the arrangement becomes legally binding and therefore enforceable by law. In order for a contract to be formed and become legally binding, the agreement must contain all the elements of a legal contract. A court will have to determine that the agreement had elements of an offer, acceptance, consideration, intention, certainty, and completeness in order to enforce the agreement between the two parties under law (MacMillan Stone, 2012).The first element of a contract is the offer which is when one of the parties in the agreement expresses a willingness to form a contract on terms that all parties will agree to. The willingness to form the contractual agreement must be formed with the intention that the agreement will bind all parties involved once it's accepted (MacMillan Stone, 2012).For example, Jim and Laura agree to give Stan Salesman one hundred dollars as a deposit to hold the blue four door sedan for a day. In this example, Jim and Laura made Stan Salesman an offer of one hundred dollars and the agreement was that he would hold the car for the day and there was an intention by Jim and Laura to return the next day and pay the balance required to purchase the car. Stan the salesman expressed a willingness to form a contract with the couple by agreeing to hold the car for a day for them. There was also a supply of information by the salesman when he informed the couple that the deposit they put down was refundable.Another important element of a contract is acceptance of the offer to form a contract. The parties involved must accept all the terms of the offer and it helps if the acceptance of the offer is worded or presented in a way that is similar to the wording or presentation of the offer. Acceptance will occur when the party who is being given an offer conducts themselves or says somet hing that objectively infers that they are accepting the terms of the offer (MacMillan Stone, 2012). For example at the car dealership Jim and Laura test drive several cars and decide on one that they particularly like, therefore they agree to give Stan a $100 deposit with the intention that he should hold the car. In this example, both parties involved accept the terms of the offer which was that the couple would pay a deposit of one hundred dollars and the car salesman would hold the car for them for a day with a verbal guarantee that the deposit will be refunded. Paying the deposit allowed the salesman to objectively infer that the couples were accepting the offer.Consideration is another important element of a legally binding contract. Consideration is the process in which a court of law will determine whether an agreement that is a result of an exchange of an offer and the acceptance of that offer, should be enforced under the law. Only exchanges that are mutually beneficial , that is something is being given by all parties involved, will a promise to perform be enforced. The presence of consideration between parties making an agreement is an indication that the parties involved intended for it to be legally binding (Stone, 2005). For example, in the case of the agreement between Jim and Laura and Stand Salesman, there is the presence of consideration in the agreement. The couple offered the salesman a deposit so that he would hold the car for a day for them and the salesman accepted the offer. Both parties would have gained from the agreement as the salesman would sell a car and the couple would get to come back and purchase the car they wanted.Finally in order to develop a complete contractual agreement the elements of the contract should be enhanced by other requirements. These requirements are that the parties involve should intend to create relations that are legally binding, the terms of the agreement should be clear and certain and that the agre ement is the final agreement and both parties do not require further information to clarify the offer. The presence of these requirements ensures that the court can recognize the contract as enforceable even if some of the elements are missing (Stone, 2005) .For example in the car dealership agreement case, the agreement between the couple and the salesman had the intention to create legal relations which were purchasing a car which is a legal process, the agreement between the two parties was certain, that is the couple would pay a deposit for the salesman to hold the car and they would return to purchase the car and both parties had a final agreement and none of them required further information when the agreement was finalized.According to the elements th...