Whether you are purchasing a car from a dealership, or a vase from someone on Facebook Marketplace, all contracts have elements that must be met to be legally enforceable. A contract is a set of legally enforceable promises, entered by two or more parties, to make their dealings predictable and to prevent risk. For a contract to be enforceable, the following three elements must be met: offer, acceptance, and consideration. An offer is an indication of willingness to enter into a contract, communicated by the person making the offer. Acceptance is the compliance or agreement by one party with the terms of the other party’s offer. For consideration to be present, each party must receive something of value. For example, a product or service being sold could be consideration by one party, and the price paid for the item or service could be the consideration from the other party. In addition, while not technically an element of contract formation, the parties must also have legal capacity for the contract to be enforceable. Capacity applies to both parties’ ability to understand the terms of the contract. Parties generally lack legal capacity to enter into a contract if they are minors, mentally incompetent, or under other circumstances that prevent a meeting of the minds. For assistance creating legally enforceable contracts or analyzing the terms of an existing contract, call the Business Law Group today and speak to an attorney.
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