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Archive for the ‘Legal Contracts’ Category

A legal contract is a set of promises that the law will view as duties of the promising parties. Those parties must perform their promises; should one party fail to do so, the law will enforce a remedy for the other party. Parties should seek the advice of an attorney before drafting a contract.

Mutual Assent
1. A legal contract requires mutual assent by the parties. Mutual assent includes both offer and acceptance. One party (the “offeror”) must demonstrate to the other that the offeror is willing to enter into contract. The other party (the “offeree”) will then have the power to create a contract by accepting the offeror’s terms.

When the offeree does accept, there is mutual assent. In deciding whether there was a valid offer and acceptance, courts will look at outward, objective behavior, rather than what was in the parties’ minds at the time.

Consideration
2. Even if there was mutual assent between parties, every legal contract still requires valuable consideration. Consideration means that each party has changed its legal position in return for the other party’s promise. However, this change in position must be of legal value.

For instance, let’s say John is legally bound to pay child support, and then he makes a contract with Mary in which his end of the bargain is a promise to pay child support. The law will not recognize any legal value in John’s promise, because he was already obligated by law to perform it. The contract would fail due to lack of consideration on John’s part. Read the rest of this entry »