Anatomy of a Contract

When most Americans perform an act that is against the law, they do not even realize what the consequences are of their actions. There are a lot of people that do not know the extent of the law and what technically is and is not against the law.

A contract is an agreement that can be enforced in court and is formed by two or more parties who agree to perform or to refrain from performing some act now or in the future (Miller, Cross, and Jentz 289). In other words, it is a set of legal promises between two or more people or businesses. Contract law includes the elements of a contract, genuineness of assent, fraud, duty to disclose, disaffirmance and good faith. In order for a contract to be valid, there are essential elements that it must have. These elements include: an agreement, consideration, legality, and capacity.

Among the 4 elements of a contract, the most important is agreement because without agreement between parties, no contract can be formed. Agreement to form a contract includes an offer and acceptance; one party must offer to enter a legal agreement and the other must accept the terms of the offer (Miller, Cross, and Jentz 290). When the parties have a “meeting of the minds,” an agreement has been made. It is important that all of the parties involved in the contract understand the agreement and there are no misunderstandings between them. Next is consideration among the parties. Consideration can be defined as the value, such as cash, given in return for a promise or in return for a performance (Miller, Cross, and Jentz 302). It is broken down into two elements: legal value and bargain for exchange. Something of “legally sufficient value” must be given in exchange for the promise which may consist ...

... middle of paper ...

...e is a relationship between two or more parties, each party has a duty to disclose. This means that each party must release every piece of information accurately; failure to do so may be fraud. Good faith is enforced in contract law to try and stop fraud from happening. Good faith is a general presumption that the parties to a contract will deal with each other honestly fairly, and in good faith, so as to not destroy the right of the other party or parties to receive the benefits of the contract (“Implied”).

Works Cited

Miller, Roger LeRoy., Frank B. Cross, and Gaylord A. Jentz. Essentials of the Legal Environment. 3rd ed. Mason, OH: South-Western Cengage Learning, 2011. Print.

"Implied Covenant of Good Faith and Fair Dealing." Wikipedia, the Free Encyclopedia. Web. 11 Dec. 2011.