A contract is a legal document between two parties. In order to be enforceable, the contract must contain seven elements. While more specific requirements may differ by state, the basics of contract law require that these seven elements exist regardless of where the contract is formed. If even one is missing, a contract may be voided and the parties will be excused from any obligations.
An offer is the start of an agreement. One gathering must propose a course of action to the next, including positive terms. For instance, if the proposition is an offer to buy shirts, it must incorporate amount, cost and a conveyance date. At the point when the offer is conveyed to the next gathering, he has the directly to acknowledge, dismiss or change the offer. On the off chance that he rejects it, the offer kicks the bucket. On the off chance that he alters the offer, the first offer bites the dust and his changes turn into another counteroffer that the other party can acknowledge or dismiss.
An offer can be acknowledged recorded as a hard copy, face to face or via telephone. The acknowledgment should just be conveyed to the offering party, with a conspicuous presentation that the tolerant party expects to be bound by the purchaser’s terms. Under the “Post box Rule” utilized in many states, an offer is considered accepted when the accepting party places it in a letterbox or sends an email, regardless of whether the offering party never really gets it.
Consideration is something of value that the parties are contracting to exchange. Generally, one party exchanges money for property or services, but the parties can both exchange property or services, as long as a court would find that each party’s consideration has sufficient value.
Competence, also called legal capacity, is a party’s ability to enter into a contract. The most common reason for incompetence is age. A party must be at least 18 years old to enter into a contract. If a minor signs a contract, she has the right to cancel it. Another reason for incapacity is mental illness. A person incapacitated by a disease or disability, who do not understand the terms of a contract he entered, has the right to rescind his acceptance of an offer, voiding the contract. Lastly, a person under the influence of drugs or alcohol may be considered incompetent if the other party knew or should have known that the person’s impairment affected his ability to understand and freely consent to the contract.