Elements Of A Contract Essay

One of the elements of a contract is contractual capacity. This means that for a contract to be legally binding the parties must have the capacity to comprehend and appreciate the terms of the contract. Minors, individuals who are mentally challenged, and those who are under the influence of intoxicating substances are not legally capable of forming binding contracts. The requirement of capacity helps prevent vulnerable members of society from being required by an agreement to take on risky obligations or unfair responsibilities that they probably are not able to fully understand. Someone who is intoxicated has their judgement impaired and therefore would lack rational judgement and the decision-making ability to negotiate a contract

“For there to be mutual assent, or a meeting of the minds, the parties must agree on the essential terms of the proposed contract” (McKenzie, 2016). This is typically demonstrated by both parties agreeing to a valid offer then writing up a contract and signing it. Should an offer not reach agreement a counter offer is usually submitted until both parties reach an agreement and acceptance of the terms. Mutual assent can exist but not be explicitly expressed. If I were to ask a friend who is a mechanic to change the oil in my car and he does so the contract is implied which would obligate me to pay my friend his usual rate for performing an oil change. While no actual words of agreement, my request and their actions created an implied in fact contract. A third element of a contract is consideration. Consideration is something paid, done, or not done to render a promise enforceable (CTU, 2013). If I promise to pay you $60 if you mow my lawn both sides have given consideration. I would have to pay you the $60 and you would have to mow my lawn. Whereas if I promise to give you $60 there is no consideration as you would not be giving up

The terms of a contract need to be clear to avoid confusion and establish that a contractual agreement was intended. A poorly defined or contract that is too vague would have no exact meaning and would not be upheld in court. Such uncertainty in terms of a contract or incompleteness implies that the parties have not reached an agreement in the eyes of the law and could render the contract void as if it never existed despite any assumptions or actions on the part of the parties