Many different types of legal contracts exist in the world of business. Some of these legal documents go on for pages and pages and cover many complex elements, while others cement an agreement in just a couple of pages.
All contracts, though, contain several essential elements that make them enforceable through the legal system.
Beginning with an offer
Information from the Houston Chronicle points to the importance of a clear offer from one party to another. This could take the form of a seller offering a property to a buyer for an agreed-upon price. For the satisfaction of clarity, the contract must identify the property in specific terms and it must include the payment price.
The second step involves the buyer voluntarily accepting the offer. Any form of coercion will likely invalidate the terms of the contract. The accepting person must sign on the bottom line without duress.
The third requirement of a binding contract includes the concept of consideration: one party agrees to pay or give something for another thing of value. While consideration often involves a monetary amount, it could also refer to other values such as knowledge or services.
Moving on to legal intent
A contract involves the intent of each party to enter into a legal agreement. This means it has more force than a loose agreement and could form the basis for later legal action such as a lawsuit for breach of contract. It also means that the essential agreement in the contract follows all applicable laws.
Finally, the parties to a contract must have a reasonable level of competence and have reached the legal age to sign. Without these essential criteria, a contract could fail to withstand a legal challenge.