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Elements of a Contract

Detailing the essential elements of a contract.

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Our entire financial system is based on the independence of individuals to contract and a scheme of laws that enforces contracts without restraint entered into. But a lot of populace may not be conscious of what are the vital elements required to create an enforceable contract. Recently, a friend of mine asked if a contract not in writing is compulsory. We are so accustomed to seeing, contracts in writing that numerous people assume that a contract must be in writing (and lengthy) prior to it is enforceable.

Agreement is vital to any contract. Before there can be a contract, there must be a "consensus ad idem: that is, there must be a meeting of the minds" (Mallor, 2010). The two sides to a contract, whether for the construction of a shed or for having your lawn cut, must agree on the essential terms of the contract. There must be a purpose to enter into a legally binding contract. Whether the parties have reached a settlement is determined by an objective standard. What each party believes the other to be agreeing to will not be the determining factor. Rather, would an objective witness, acting reasonably, looking at all of the facts pertinent to the question concludes that the parties had come to an agreement on the essential ...