Basic elements of Contracts: Legal Information Institute (Essay Sample)

Elements of a Contract
Student’s name
Professor’s name
Course title
Date
Elements of a Contract
Introduction
A contract is defined as any agreement that creates obligations that are enforceable by law. Mutual assent, consideration, capacity and legality are the basic elements of a contract. In some states however, the consideration can be met by a valid substitutes. The breach of a contract can be remedied in case of general damages, reliance damages, specific performance, and consequential damages. This document describes the basic elements of a contract and explains the existence of a contract in the case of Jim and Laura.
Basic elements of Contracts
A contract entails much more than just an agreement between two parties or people. An offer, acceptance, intention to create an agreement that is legally binding, a price paid, a legal capacity to willingly enter a contract and the understanding and consent of the issue involved (Hesselink, 2015). Any false statements, duress, unconscionable dealings or undue influence can make a contract voidable and illegal.
Contracts are any promises that can be enforced by the law (Legal Information Institute (LII), 2016) . Remedies are provided by the law in case the promise is breached or if the law recognizes a performance of a promise as a duty. Mutual assent is the agreement by both parties to a given contract. This element must be objectively proven. In many cases, it is established through the show of an offer and an acceptance. One party must present the other with an offer, and the other party must accept it. An offer is defined as a definite promise to be bound, as long as the terms of the offer are accepted. Precisely the offered item or act will receive the acceptance. It is possible to withdraw a proposed offer before it is accepted. The party that proposed the offer, however, has to communicate adequately that the offer has been withdrawn (LII, 2016).
Acceptance takes place when an agreement is received from the party that is answering the offer. The agreement can be by way of statement or act. Acceptance must be clear and effectively communicated to the offeror. Otherwise, the law cannot assume that a person accepted the offer just because he or she has not verbally rejected it (LII, 2016).
Consideration is the item or condition that is being bargained for. This is often received by a promisor from a promisee. There are many types of consideration including real or personal property, some act, a return promise, or a forbearance (The Law Handbook, 2016).
By simply agreeing, two people cannot say they are in a contract. Those who are party to the agreement must be both intending to enter a legally binding agreement. Even though this is not often stated, it can be inferred from the circumstances of the making of the agreement (LII, 2016).
A legally binding contract is one in which the promise has been exchanged for adequate consideration. Adequate consideration refers to a benefit or a detriment that a given party expects or receives, which fairly and reasonably induces the party to make the promise or the contract (Montes & Irving, 2008). Consideration is also referred to as the price that is paid for the promise of the other party. The price must be something that has value, though is does not have to be money. It may be some interest, benefit or right, which is directed to a given party. It can also be some detriment, forbearance, loss or responsibility to be given, undertaken or given by the other party. As long as there is consideration, the court cannot doubt its adequacy, provided some value exists (The Law Handbook, 2016).
Contract law defines the capacity as the ability of a person to satisfy what is required for anyone to enter a binding contract. The rules of capacity often require that both parties must have acquired the minimum legal age for entering a contract. It also requires that the party must have the soundness of mind must not be bankrupt or a prisoner for the period of the contract formation. For any contract to be enforceable, the intention or the purpose of the contract must be legal (The Law Handbook, 2016).
There must be the elements of free will before any party can enter into a contract. The parties must also properly understand what is being done by each of the parties. There must be genuine consent of each party to the contract (Grundmann, 2011). A contract can only be binding between upon the parties where the essential elements of proper consent has been provided. The proper consent is subject to mistake, duress, false statements and undue influence or unconscionability (The Law Handbook, 2016).
The existence of a contract between Jim and Laura Buyer and Stan Salesman
Jim and Stan were just testing a car they liked and paid a refundable $100 so that the dealer could hold the car for a day. Even though a receipt is not issued but gives a guarantee that the amount is refundable. This is a contract in itself. In this case, the offerors of the contract are Jim and Laura, and the one answering to the offer is Stan. Stan has accepted the contract and its condition by receiving the money and agreeing to the condition that the $100 is refundable. This cont...