An Explanation of Contract Law
In today's business world of promises and actions, sometimes contracts must be made in order to deem those promises legally binding, and that, simply put defines a contract. In general a contract is a legally binding promise (West 198). But what constitutes a contract? Contracts are simple to understand but involve many aspects which may make the concept of contract law a bit difficult to grasp. Perhaps the best way to begin explaining contracts would be to present the four elements of a valid contract (Emerson and Hardwicke 81). According to Barron's Business Law on page 81, the following four elements constitute a contract.1. Capacity. Both parties must possess the capacity to enter into a contract. Whether a contract is verbal or written, both parties must be fully capable of understanding the terms of the contract.2. Consideration. There must be a value exchanged for a promise. In other words one party agrees to a certain set of terms at a certain price.3. Legality. The good or service being exchanged must be legal. For example, a contract with a drug dealer and a user based on credit terms would not stand up in court because drugs, obviously are not legal.
"A contract cannot be one-sided; it exists only if there is a promise or an action (or nonaction) on each side. Without a mutual understanding no contract can exist. On his way to pick up his reel at the bait shop he comes across an unconscious lady on the side of the rode who has broken her leg. Minors are also an exception to the laws of contractual capacity. The first, most basic type of contract is the express contract. If there is not dispute over the difference than the consideration is thought to be adequate (Barron 93). ( Emerson and Hardwicke 93)" Consideration must be present in a contract in order for the contract to be enforceable. A unilateral contract on the other hand is a bit different. Suppose Smith grows tired of his boat and mentions the fact his boat is taking too much of his time to maintain, never mentioning the fact of selling it. In order for a contract to be binding, both parties must agree and accept the terms and conditions of a contract. The most basic elements and types of contracts have been evaluated. Consideration is based on the Latin principle known as quid pro quo which translates to "something for something.
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