Consideration and Validity of a Legal Contract



Consideration and Validity of a Legal Contract

Introduction

Contract is the agreement between two mutually and voluntarily agreed parties to enter into a legal obligation. The agreement between the parties emphasise the importance of legal condition which means that “agreement” is the moat important ingredient of a contract. According to Mulcahy the importance of agreement can be defined as in order to consider the formation of contract, “English Law looks for the agreement between the parties” (Mulcahy, L. 2004 pp.57). Agreement is one of the essential elements that form the basis a contract. There are various other elements which constitute the validity of contract. After formation of a contract “validity” of the contract is the most important question to investigate. Consideration is the scale to measure the validity of any legal agreement. It is also an essential constituent in the legal validation of a contract during any alterations. This means that after formation of a valid contract if there is any alteration or change in its terms, it also depend on the alteration in proper considerations. There are various terms that are associated with the definition of contract such as offer, acceptance, promise, performance, intention and consideration.

Discussion

Validity of a Contract

The validity of a contract depends on the following essential constituents

Mutual agreement between parties

Considerations in fair monetary value

Intension of both parties to create legal relation

Written document

Must be for lawful purpose

Eligibility to contract (not minors, insane or intoxicated)

Mutual Agreement between the Parties

It is necessary to enter into any contract that the parties must be mutually agreed without any forceful obligation. The law provide some measures to define the criteria for mutual agreement between the parties. Chirelstein provide the relationship between agreement and performance and the time lapse and other conditions which affect the agreement and the performance of the contract as well as the estimates for the future market conditions (Chirelstein, pp.3). These consist on the offer, acceptance and promise.

Offer and acceptance

Agreement is said to be made if one party offers and the other accepts this means that the parties are bind in a mutually agreed contract. This offer and acceptance can be oral or written. Offer can be define simply but only if it is accepted simply or in a proper way. In most of the cases this does not happen as the offer once made it might require some time by the other party to make decision. This can create complication for example there can be a need to make some alterations in the offer or sometimes the party take more than usual time to accept the offer and it creates some legal obligation or limitations to the original offer. Offer also rely on the principle of validity which can be explain on the basis of “reasonable time” otherwise it may be time barred or fall under the category of limitation.

Delay in the acceptance of the offer may also result in the “revocation of an offer”. The person who made the offer has the ...