Contract

What is a contract

A contract is a formal agreement between two or more individuals, organizations or governments, and entails some rules and details governing each of the parties involved (Marson & Ferris, 2015). For example, in an organization, a contract may outline the roles and responsibilities of an employee or supplier for a given period of time.

Elements of a contract

A valid contract is composed of a number of elements. For example, a contract is said to be valid if it has an offer and acceptance. What happens is that one person or organization must create an offer and present it to the other party, out of which the latter is supposed to accept or deny the offer, based on the stipulated may be terms and conditions (Sehgal, 2018). If he or she accepts the offer, such a contract is said to be valid. Based on the definition of a contract, as an agreement between two or more parties, the same way those parties involved must reach into an agreement before anything else. Actually, one party creating an offer and the other accepting the offer marks the first step of any agreement. In addition, a valid contract must create a legal obligation. Precisely, besides the creation and acceptance of an offer between the parties involved, there is need for going a step further and creating a legal obligation as well. A legal obligation becomes necessary when one party breaches the details of the contract. For example, if the contract entails an employee working in a given organization for a specific duration and being paid a given amount of money, but that employee happens to breach the contact while he or she is half way the agreed duration, such an organization can seek legal interventions in order to find a way out. In addition, for a contract to be valid, the consent of parties must be in place (Marson & Ferris, 2015). This means that one party should not coerce another to enter into a contract. Moreover, parties entering into a contract must competent in terms of having a sound mind. Consecutively, a contract is valid if the object of the contract is lawful. Parties cannot enter into an agreement to supply illegal drugs.

Statute of Frauds

Statute of frauds are contracts which requires that the details of the contract be in writing as well as signed by the parties involved. The writings and signatures of the parties serve as evidence of the agreement, especially when the disputes between the parties is to be resolved in the courts of law (Blum, 2007). Statutes of fraud were first started in England during the 17^th century. Moreover, there are numerous contracts which are covered by a statute of fraud including the sale of products of high value, sale of land, and debt guaranty.

Unilateral and bilateral contracts

A unilateral contract is one that requires one party to make a promise to the other party as a compensation or reward after the latter agrees to perform or not to perform a given task (Rocket Lawyer Incorporation, 2018). For example, when the police officers place $1000 to anyone who will provide information concerning the whereabouts of a given criminal. On the other hand, a bilateral contract exists when there is a reciprocal consideration or mutual exchange between two parties which needs a task to be or not to be performed. For example, when one party is selling a piece of land, and another party agrees to buy it at a given amount of money.

An option contract

This contract exists when two parties enter into a contract in such a way that one party gives the other an option or certain terms such as an action or timeframe. For example, when a customer approaches a car dealer and does not have enough money to buy a specific car, the latter can ask the former to pay a down payment first, and clear the rest after three days.

Whether or not a mentally ill person can enter into a contract

A mentally ill person cannot enter into a contract since the law requires the parties entering into an agreement to be competent and sober. Mentally ill individuals are recognized as incompetent to enter into a contract, and any contract that involves such individuals is termed as invalid (Sehgal, 2018).

Duress and how it affects the validity of a contract

A duress entails a situation where one party enters into a contract after being coerced or forced by the other party (Sehgal, 2018). For example, a situation where a tycoon forces a peasant farmer to sign an agreement that the latter has agreed to sell a piece of land to the former. If there is an enough proof that this coercion took place during the time of the agreement, then the court of law declares such a contract as null and void.

Whether or not a promise of a gift is a valid contract

The promise of a gift is not a valid contract and this is due to the fact that there is no consideration to one party (Sehgal, 2018). Precisely, if one party fails to give out the gift as promise, the other party cannot claim that there the latter breached the contract, the contract never even existed.

References

Blum, B. A. (2007). Contracts: Examples & explanations. Austin: Wolters Kluwer Law & Business.

Marson, J., & Ferris, K. (2015). Business law. Internet Resource.

Rocket Lawyer Incorporation, (2018). What’s the Difference Between Bilateral and Unilateral Contracts? Retrieved from, https://www.rocketlawyer.com/article/whats-the-difference-between-bilateral-and-unilateral-contracts.rl

Sehgal S., (2018). 10 Essential Elements of a Valid Contract in Business Law. Retrieved from, http://www.shareyouressays.com/knowledge/10-essential-elements-of-a-valid-contract-in-business-law/94753

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