Terms Of A Contract
When two or more parties agree to certain conditions in order to form a binding agreement, they have entered into a contract. A contract can be either written or oral, but it is typically advisable to memorialize important agreements in writing. This written record can provide evidence of the terms of the agreement, as well as each party’s obligations and rights.
There are four essential elements to any valid contract: offer, acceptance, consideration, and mutual intention to be bound. An ‘offer’ is an expression of one party’s willingness to enter into a contract on specified terms. The ‘acceptance’ of that offer by the other party signifies their agreement to be bound by those same terms. ‘Consideration’ refers to something of value that each party contributes under the terms of the contract; this could be money, goods, services, or anything else of value. Finally, both parties must demonstrate their ‘mutual intention to be bound’, or their serious intent to actually follow through on the terms of the contract.
If any one of these elements is missing, the contract will not be considered valid and enforceable by a court. For example, if there was never an offer made in the first place, there can be no legally binding agreement. Similarly, if one party makes an offer but the other never accepts it, there is no contract. An offer that is accepted but not supported by consideration is also void; courts will not enforce an agreement where one party has given nothing in return.
