A contract can be described as a legal agreement between two or more than two individuals, parties or organizations to do or not to do things and actions for a lawful consideration. It is a document to show rights and duties or parties with all terms and conditions of a contract. A contract is just like a deal or promise between parties to do variety of certain things for the well being of all involved parties. A contract is a document that tells what all parties have agreed to do in order to achieve mutual goals. Contracts are enforceable by law in case of any breech or violation if they are valid. Here is a question raised by many people that what makes a contract valid? Means what are basic elements to make a contract enforceable and valid in eyes of law? Here are complete details of basic elements of a contract given below.
Nonappearance of any of these below mentioned elements will make the contract not valid and not legally binding.
- Offer: no contract is valid without an offer so there must be a valid offer to make a contract valid and enforceable by law. Offer should be Cleary defined and stated in the contract. An offer is nothing but an expression of willingness to contract on a specific set of terms. An offer is made by a party with the intention that if the offer is accepted by any other person then he/she will be bound by a contract to complete his/her duties and obligations under the terms and conditions of the contract.
- Acceptance: an offer needs acceptance in a contract to make it valid and legally binding. Acceptance of the offer is second basic element of a valid contract. An offer must be understood by the all parties and its acceptance must be specific and clear. Nothing but only what is offered can be accepted by the involved parties but if any new terms of conditions is suggested to accept the offer then such contract will be regarded as conditional contract.
- Consideration: Third important element of a valid contract is consideration and it must be something of value in the eyes of the law. Consideration in a contract must be sufficient but need not be adequate. Consideration may consist of a promise to perform a desired action or a promise to not to do certain things or actions as per conditions of the contract. Consideration in the contract must have a value that can be determined neutrally.
Contract can be an important document in business and other fields of life so it should be prepared carefully with attention. Preparation of agreement in written form and also best to save as record and can be used as written evidence to settle disputes. Use of contract template is an ideal and effective way to write contracts with all details and features. One can easily find and download appropriate contract templates as per needs and requirements. These templates are editable and a user can make necessary changes in them easily.