What are the four key elements of a valid contract? (Note to : Listed in the book 1) Agreement, 2) Consideration, 3) Contractual Capacity, and 4) Legality).

Sealing the Deal 1

Running Head : Sealing the Deal

Sealing the Deal

The 4 Elements in Creating a Legally Valid Contract

Name

School

Essay assignment identifying the four essential elements that make a contract legal

Professor 's Name

March 2007

Sealing the Deal 2

When we were kids , sealing the deal ' on something was merely a matter of spitting in the palms of our hands and shaking on it ' If for some reason one of the friends involved backed out of the deal , resolving the issue

was as easy as uttering .but you promised ' Nowadays contracting ' is a bit more complicated . Needless to say , breaking a contract offers pretty serious consequences . For this reason , creating a contract is not as easy as it was when we were kids . There are certain fundamentals to consider when drafting a contract in to make contracts clear . Along with signing your name on the dotted line , four key elements must be considered in to make any contract valid Those elements include agreement , consideration , contractual capacity and legality . Of course , fine tuning must also be considered , but properly utilizing these elements with any contract will ensure that the deal is crystal ' for all parties involved

A contract is a legally binding agreement enforceable by any court of law (Wiktionary , 2004 . With the exception of marriage , a simple Will you ' and Sure ' sometimes will not hold up in court . While all walks of people can create a contract , making it legally binding is the secret to its validity . The first major element to consider when creating a contract is agreement . This element identifies who the parties involved are , and the purpose of the contract . For example , Mike has agreed to purchase a car from Johnny . This agreement identifies Mike and Johnny as the parties bonded , and what the purpose of the contract will be . The next element is consideration . This element states that while both parties will gain from the contract , each will be making a sacrifice in to benefit (Wikipedia , 2004 . In our example , Johnny has agreed to sell his car to Mike . Their agreed terms are 200 .00 /month for 12 months . Johnny will sacrifice his vehicle , but in exchange will receive income . Mike will sacrifice 200 .00 a month

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for 12 months , but in exchange he will receive a vehicle . The third element is contractual capacity . This element stresses the importance of a person 's ability to enter into a legally binding contract (Wick 2006 . If Mike were intoxicated when he entered into the contract , he legally would not be considered competent enough to agree to anything Equally , if Mike were a minor , he also would not have the ability to enter into a contract without guidance from guardians . The final essential in creating a valid contract is legality . The agreed-to terms must involve legal issue , and must be enforceable in a court of law

Essentially , any issue that may require a contract should be...