LAW

Law

Law

Introduction

Legal and authentic business today is mostly done through contracts and agreements. This is a statement of mutual understanding that is between two parties based on demands and profits which both can achieve through the contract and the business. Some elements can be described in the formation of the contract. These elements can be considered as the essential bodies which make up a contract. If the essential elements are not met the there is a chance that the contract is not accepted and may lead to the termination of the business or project. Based on the elements of contract it can be known whether the terms and agreement between two parties is being followed.

Discussion

Legal elements of contract formation

There are mainly five elements of contract formation. These can be described as

Offer

Acceptance in compliance with the terms related to the offer

Objective or Legal purpose

Obligation mutuality

Consideration

Offer

The offer in the elements of contract is defined as the willingness to approach a bargain made in a way to justify someone in the understanding that the agreement related to the bargain or offer is invited and would be concluded through it.

Acceptance

Acceptance is related to the offer that can happen in many different ways. The acceptance or approval of an offer is the expression of assent to the conditions that were being made by the person offering them in a way that is required for the offer. The acceptance would not changed the terms and conditions of the offer. If in a condition that the terms are changed then the offer is rejected. However, a change in the material of the contract is termed as a counter offer which is to be accepted by the other person/party

Legal purpose

There should be a legal purpose for the objective of the contract that is being made. This can be considered by an example of the illegal distribution of drugs contract. This contract is not binding the necessary elements as the purpose for which it has been made is illegal itself.

Obligation mutuality

Obligation mutuality can also be considered as the meeting of minds. It refers to the mutual understanding of the parties and the assent for their expression towards the agreement. Both the parties must be agreed to the same thing, at the same time and in equal sense. The mutuality of parties, the acceptance and offer of the contract is based on the standard of the objective about what the parties discussed and did in accordance of the contract.

To make sure that the mutual understanding is present it is important to look over the communications that have been made between the parties and the situations related to the communications. The offer of the contract should be clear accordingly with the acceptance of the terms and conditions that are mentioned in the contract. If the mutuality is contested then the nature of contract is questioned. If it is concluded that one of the party had drawn inference of promise from the conduct of the other party then that promise would be ...