Four Essential Elements of a Contract
Offer
There must be a definite, clearly stated offer for something. It does not include estimates, requests for proposals, letters of intent or expressions of interests. At times an offer will lapse. This happens when the time for acceptance expires, the offer is withdrawn before it is accepted or there is a reasonable time after in the circumstances after the life of the offer.
Acceptance
Only want can be accepted should be offered. This means that the offer must be accepted exactly as offered without any changes. If new terms are presented this is called a counter offer. This can wither be accepted or rejected. Before there is an agreement there can be many offers and counter offers. It is the acceptance of the offer that brings the negotiations to an end by establishing terms and conditions of the contract. The acceptance can be given verbally, in writing, or inferred by action that clearly indicates acceptance.
Intention of Legal Consequences A contract requires that all parties involved intend to enter a legally binding agreement. They must understand that the agreement can be enforced by law. The intention to create legal relations is presumed. So the contract doesn’t have to state that you understand the legal consequences that can follow. If the parties involved decide that not to be legally bound by the contract it must clearly be stated.
Consideration
In order for the contract to be binding it must be supported by valuable consideration. That means that one party promises to do something in return. Consideration is what each party gives each other as the agreed stipulations of the contract. Usually this is the payment of the contract.
Breach of Contract The breach of contract happens when the party that signed the contract fails to live up to what was promised in the contract. There are a lot of legal