Contract Law - introduction and formation

In this text, I will talk a little about what a contract is and some of its aspects, such as its formation.

A simple word that can be used as a synonym for contract is agreement. This idea implies that for a contract to be formed it is necessary that at least two people give their mutual consent to the agreement. An agreement is made between two or more people, who are the parties to the contract.

And to regulate the formation and the effects of the contracts exist the Contract law. But from the perspective of Contract Law, contracts must have some elements without which an agreement can not be considered a legal contract. They are: offer, acceptance, consideration, and the mutual intent to enter into an agreement.

In addition, it should be possible for any party to require the fulfillment of the contract, or a compensation, in courts. It means: he agreements must be enforceable.

On the other hand, for Contract Law, the contract may take any form: it may be written, oral, or it may assume any other non-verbal form, such as a tacit contract or made by gestures.

There may also be mixed forms, with a written offer, and oral or gestural acceptance, for example. This is common in restaurants or public transportation.

The advantage of a written contract is that it is easy to prove its existence in order to enforce the contract, but the same does not happen with oral or informal contracts.

The Offer

The first step in the performance of a contract is the Offer. An interested person must make an offer by stating the terms they wish the other party agrees to. The terms of this offer, however, can be changed through negotiation between the two parties.

The Acceptance

If the other party accepts the offer, the agreement is made. Otherwise, you can make a counter-offer. When both parties agree on the terms of the contract, it is complete.

The Consideration

Another essential element is Consideration. Both parties need to give or do something for the other. Consideration makes the contract have some measurable value. Generally, one party gives money to the other, but other things can be used as consideration.

The Mutual Intent

For the agreement to be valid as a contract, both parties must agree to the contract and commit to their fulfillment. It is not enough to declare an interest or agree that the terms are good. There must be a conscious commitment to the contract.

An important observation is that the contract must be done by people able to do so, otherwise the contract will not be fully enforceable, as happens when one of the parties is a minor.