What Is a Legal Contract?
Marko Vujosevic
What Is a Legal Contract?
A legal contract is an agreement between two or more parties that is enforceable by a court of law. Contrary to popular belief, a contract can be verbal and need not be written or signed.
In essence, a contract is a set of promises, with one party promising to do something for the other in exchange for a benefit. For a contract to be legally binding between two parties, one must make an offer and the other must accept it. If one side fails to live up to their end of the deal, then it is open to the other party to seek a legal remedy.
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Mutual agreement. One side extends an offer, which the other side accepts
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Consideration. Each side must give something up in exchange for a benefit
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Competent parties. To be enforceable, all parties to the contract must be of legal age, of sound mind, and unencumbered by alcohol or drugs
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Genuine assent. All parties entering into the agreement must do so freely; if one or more parties have made a mistake, the contract may be unenforceable
To qualify as a legal contract, an agreement must have the following five components: •
Legal purpose. If part of a contract’s terms include an illegal act, the contract is unenforceable
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