Key Elements of a Valid Contract
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Display an example of a written contract that you have entered into. It could be a purchase agreement for a home, car or furniture, a warranty agreement, or a contract for home repairs. Identify the features that make it a valid contract.
Write a short contract to provide a service to someone. You may request monetary reimbursement or something else of equal value from the other party. As an example, you may write a contract with one of your children to provide a certain reward (such as a car or a vacation) if the child maintains an agreed upon grade point average at school. Make certain that your work satisfies the basic requirements of a contract.
To assist the committee with understanding contracts you provide the committee with a scenario and your thoughts for the following scenario:
You invite a home roofer to your home to discuss repairs and replacement of the roof that needs to be done. You discuss what needs to be repaired, installed as new work, and the final price to include the payment of material costs. Nothing is written down. You agree on terms and the roofer then performs the work, for which you pay him. Have you entered into a contract? If so, what type?
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Solution Summary
There are two types of contracts: Written and Oral/Verbal. Written contracts can be proven, while oral/verbal contracts can sometimes be impossible to prove. However, the nature of oral contracts does not relieve either party of the burden of performance. Meaning that both parties are still obligated to deliver on the agreed upon terms. Consequently, oral/verbal contracts must still involve the 6 aforementioned areas of a contract (e.g. Mutual Consent, Offer and Acceptance, etc...).
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1) A typical legal contract must involve:
a. Mutual Consent (also called Meeting of the Minds)-where both parties understand the expectations (e.g. I go to a restaurant and pay to eat. I expect my food while the restaurant expects my payment).
b. Offer and Acceptance-I agree to pay $3 for a value meal. Therefore, by agreeing to pay the $3, I have accepted the restaurant's offer.
c. Mutual Consideration-Exchange of something valuable. I exchange my money for food.
d. Performance or Delivery-The restaurant has to fulfill its obligation by giving me/delivering the food that I paid for.
e. Good Faith-Both parties are acting in good faith. The restaurant will not give me something other than my value ...
Education
- BA, Brooklyn College
- MBA/HCM, Phoenix University
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