Contracts are part and parcel of every individuals every day life. For example, when an individual buys a home or rents an apartment a contract is involved.
A contract has many different definitions, but quite simply a contract is a promise enforceable by law. A contract requires the agreement of two or more people, one is normally making an offer and the other is accepting it. So therefore a contract quite simply is an agreement made by two parties. One party agrees to do something in exchange for something from the other party. For example an office worker would type documents etc. in exchange for a wage. Therefore a business could not exist without contracts.
Requirements of a Valid Contract
For a contract to be valid, both parties must give their assent and agreement. An essential element of a valid contract is that all parties must agree on all major issues.
The six requirements for a contract to be valid are as follows:-
1. An agreement which usually consists of an offer and an acceptance of that offer.
2. The agreement must have consideration which is something bargained for and given in exchange for a promise
3. The parties must have the capacity, or legally ability to form the contract
4. The contract must be based on the genuine assent of each party, that is, both parties must be agreeable to the terms of the contract.
5. The subject matter of the contract must be legal.
6. Contracts must be in proper written form to be legal.
Offer and Acceptance
The most basic rule of contract law is that legal contract exists when one party makes an offer and the other party accepts it. For most types of contract, this can be done either orally or in writing ...