Walker is an attorney licensed to practice law in Michigan and Illinois.
With this general overview of essential terms, consult an attorney to make sure your next contract is legally enforceable and meets your original intentions.Ĭarlon B. Whatever consideration is provided under a contract, it must be clearly agreed upon by both parties to the contract or it must be clearly implied by the terms of the contract. In addition, consideration may consist of a restraint from suing on a claim that may be part of a legal dispute. A review of the communications between the parties and how they performed the terms of the contract are used by the courts to determine whether mutuality of obligation or a meeting of the minds exists.Ĭonsideration is a very important element of an enforceable contract. If one party to a contract has been fraudulently misled about the terms of the contract by the other party, the contract is voidable. The parties must agree to the same thing, in the same sense, and at the same time. In order for there to be an enforceable contract, the parties must have a common intention or a meeting of minds on the terms of the contract. For example, a contract for the sale of illegal drugs is not enforcable, and a person cannot promise to transfer clear title to real estate if the property is encumbered by a lien or mortgage. In order for a contract to be enforceable, its subject matter cannot be prohibited by law or violate public policy. In general, most individuals are deemed to have the capacity to contract unless the person is a minor, incompetent or insane, or drunk or drugged when entering into the contract. Parties to a contract must be competent to enter into a contract. If the party to whom the offer is made changes the terms of the offer, he or she has rejected the initial offer and has made a counteroffer that may or may not be accepted by the other party. In addition, an acceptance must be made in the manner requested or authorized by the offering party. An offer may only be accepted by the person to whom it is made unless an agent is authorized to accept on behalf of that person.
If any of these elements are not present, an offer has not been made.Īcceptance is a final and unqualified expression of consent to the terms of an offer. An offer should consist of: (1) a statement of present intent by the offering party to enter into a contract (2) a specific proposal that is certain in its terms and (3) a communication that identifies the person to whom the offer is made. An offer may be made in different ways, such as in a letter, an email, or even your behavior, so long as it conveys the basis on which the offering party is willing to contract.
In general, the Statute of Frauds says that a contract for the sale or transfer of land, or a contract that, by its terms, cannot be performed within one year of its execution, are only enforceable if it is in writing and signed by the parties. A signed, written contract that contains the essential provisions reduces this risk.Ī law called the “Statute of Frauds” requires that certain types of contracts be in writing to prevent an individual from offering proof of a nonexistent agreement through fraud or perjury. A contract can be oral, but an oral contract (sometimes referred to as a verbal contract) may be difficult to enforce unless its terms can be proved or are admitted by the parties. Don’t be one of them.Ī contract is intended to formalize an agreement between two or more parties. But too often, individuals enter these agreements without considering the essential provisions necessary to create an enforceable contract.
Every day, people enter into agreements: selling or leasing property, becoming an employee or independent contractor, settling disputes, and much more.