Different elements of a contract - Assignment Example

Different Elements of a Contract Different Elements of a Contract A contract is an “agreement between two or more parties in relation to a particular subject” (Larson, 2010). To be legally binding, a contract must be composed of several elements. The first element is the offer. An offer is “an expression of willingness to contract on a specific set of terms, made by the offeror with the intention that, if the offer is accepted, he or she will be bound by a contract” (Smithies, 2007).

The offeror is the person who made the offer while the offeree is the person who received the offer (Binder, n.d.). An offer may be an offer to sell a car or an offer to construct one’s house. The next element of a contract is the acceptance. An acceptance is “an expression of absolute and unconditional agreement to all the terms set out in the offer. It can be oral or in writing. The acceptance must exactly mirror the original offer made” (Smithies, 2007). The offer should be accepted without any conditions.

If there are any changes, modifications or additions in the original offer made, it is considered as a counter-offer which must also be accepted by the offeror. A counter-offer cannot be considered as an acceptance. An example of this is when the offer price for a car is $20,000 and the offerer gets back at the offeror and asks that the price instead be $18,500. The legal consideration is that thing of value which the parties to a contract must receive (Smithies, 2007). A contract will only be binding if it is supported by something of value.

For a contract to be valid, the persons entering into a contract should have the legal capacity to do so. This means that they should not have any mental impairment; they must be of legal age, i.e. they are not minors and must not be prisoners (Fitzroy Legal Service Inc., 2010). For example, a person who is suffering from autism cannot enter into a contract with another person because of his mental impairment. He might be entering into an agreement which he does not fully understand, which is not fair for him and the other party.

Another basic element of a contract is that there should be a genuine consent between the parties entering into a contract. This is what is often termed as a “meeting of the minds” of the parties on all the conditions embodied in the contract (Larson, 2010). “The parties must agree to the same thing, in the same sense at the same time” (Window.state.tx.us, n.d.). There should be no mistake, false statements, duress and undue influence (Fitzroy Legal Service Inc., 2010). To make a contract non-binding, the mistakes should “go to the very basis of the agreement” (Fitzroy Legal Service Inc., 2010). In the case of false statements, there are three types, which are fraudulent misrepresentation, innocent misrepresentation and negligent misrepresentation (Fitzroy Legal Service Inc., 2010). An example of a misrepresentation is when a person sells his car to another, knowing too well that the engine has some defects.

If he did not disclose this to the buyer and still asked for a higher price, there is misrepresentation on his part. This can make the contract invalid. Duress on the other hand occurs when there is actual or threatened violence to either of the contracting parties directly or to their families or close associates (Fitzroy Legal Service Inc., 2010). Duress may be illustrated when a person threatens another person, that if he does not sell their house to him, he will kill one of his children.

Undue influence refers to the taking advantage of one party over the weakness of the other party. All of the above elements mentioned are necessary to make a contract valid and binding. Contracts are important in the lives of people. One enters into a contract when working for a company, buying a house or hiring the services of a lawyer. It is therefore important that before anyone enters into a contract, he must be aware of the essential elements of a contract to protect him from entering into something which is not legal and not binding.

References Binder, P. Z. (n.d.). Elements of a valid contract. Retrieved 2012, from www2.gsu.edu: http://www2.gsu.edu/~rmipzb/contracts.htm Fitzroy Legal Service Inc. (2010, July 1). Elements of a contract. Retrieved July 16, 2012, from lawhandbook.org.au: http://www.lawhandbook.org.au/handbook/ch12s01s02.php Larson, A. (2010, December ). Contract law - An introduction. Retrieved July 16, 2012, from expertlaw.com: http://www.expertlaw.com/library/business/contract_law.html Smithies, D. (2007, August).

Contract - Elements of a contract. Retrieved July 16, 2012, from tutor2unet: http://tutor2u.net/law/notes/contract-elements.html Window.state.tx.us. (n.d.). Legal elements of a contract. Retrieved July 19, 2012, from window.state.tx.us: http://www.window.state.tx.us/procurement/pub/contractguide/LegalElementsofaContract.pdf