If you are facing a contract dispute, it can threaten your business and your livelihood which is why it is likely you will want to know what you are facing. It is helpful to be familiar with the legal requirements of a valid contract and what you can do about contract disputes if you end up facing one.
The components of a valid contract
Any contract relationship begins with an offer for goods and services. The next element of a valid contract is acceptance. This means that the other party agrees to the offer. They must agree to the offer in kind, so that the acceptance of the offer mirrors the original offer.
The third component of a valid contract is consideration. This can be a little tricky to understand but it is generally the value given up for the contract. It can be money but does not have to be. For instance, one party can promise to do something in exchange for another promise.
The parties must also have legal intent to enter into the contract and must intend for it to be legally binding. The content of the contract itself must also be legal. In other words, a contract for illegal goods or services is not legally enforceable.
Lastly, the parties to a contract must have legal capacity. This means they are of legal age, sound mind and that they were not intoxicated or unduly influenced to enter the contract.
It is useful to begin any contract by thoughtfully negotiating it and ensuring all the components of a valid contract are met before executing the contract. Once a contract has been breached, there are a host of options available to nonbreaching parties depending on what they want the outcome to be. It is equally helpful to be familiar with your options and legal protections whenever you encounter a contract dispute.