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What are the important elements of a contract?

On Behalf of | Feb 1, 2021 | Business Law |

When entering into a business contract, most people want to avoid a dispute as much as possible. To ensure that you have a legal contract, there are some elements that you need to include.

The Houston Chronicle lists some of the critical elements of a contract.

The offer

Your offer is the purpose of the contract. This is what you and your partner agree to do when signing the contract. The offer includes all expectations so that each party can clearly understand the expectations. The offer has to be specific or the courts cannot uphold it.

The consideration and acceptance

When you draft a contract, you must spell out what a person may pay to complete the contract. This does not necessarily mean money, although many contracts use money as a form of payment. The payment is the consideration. Also, the person who receives the offer must accept the terms of the agreement within the contract. Acceptances must be willing.

The legal intent

There must be an intent on behalf of you and your partner to enter into a legally binding contract. For instance, if you were to form a loose agreement with a family member, but you never consider the possibility that one of you might sue the other, then you do not have legal intent. These types of agreements do not have legal standing.

When you write up a business contract, both of you must have legal intent. Also, the contract must follow the law. Contracts with illegal stipulations are not valid contracts.

A business contract must be clear and precise and obey all rules and regulations.