Question

Please be able to explain all elements that are necessary for a successful contract formation, one that is enforceable by law.

Answer 1

The Essential Provisions of an Enforceable Contract
There are six basic requirements in a legally enforceable contract:

1. An offer- An offer is an indication of one party's willingness to contract with another party on certain terms with the intention that if agreed by the individual to whom it is offered, the contract will become binding. An offer can be made in different ways as long as it conveys the basis on which the offering party is willing to contract, such as in a letter, a message, or even the actions. An offer must consist of: (1) a declaration of the offering party's present intention to enter into a contract; (2) a particular proposal that is certain in its terms; and (3) a statement describing the person to whom the offer is made.
2. An acceptance- Acceptance is an expression of final and unqualified consent to an offer's terms. Only the person to whom it is made may accept an offer unless an agent is authorized to accept it on that person's behalf. In fact, an approval must be made in the manner that the offering party demands or authorizes. If the negotiating party changes the terms of the bid, he or she has refused the initial offer and made a counteroffer that the other party may or may not accept.
3. Competent parties who have the legal capacity to contract- Contracting parties must be competent to conclude a contract. Most people are generally considered capable of contracting unless the person is a minor, incompetent or insane, or drunk or drugged when entering into the contract.
4. Lawful subject matter- In order to enforce a contract, it can not prohibit its subject matter by law or infringe public policy. Of example, a contract for the selling of illegal drugs is not enforceable, and if the property is burdened by a lien or loan, a person can not agree to transfer clear title to real estate.
5. Mutuality of obligation- The parties must have a mutual purpose or a meeting of minds on the terms of the contract in order to have an enforceable contract. In the same way, and at the same time, the parties should agree on the same thing. If the other party has fraudulently misled one party to a contract regarding the terms of the contract, the contract is voidable. The courts use a summary of the correspondence between the parties and how they performed the terms of the contract to decide whether there is mutuality of obligation or a meeting of minds.
6. Consideration- Consideration is an important element of a contract that can be implemented. Consideration can be either money or a promise. Furthermore, consideration may consist of a restraint from suing a claim which may form part of a legal dispute. Whatever consideration is given under a contract, the parties to the contract must clearly agree on it or the contract terms must clearly suggest it.