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Why should business people know the elements of a contract?

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What are the elements of a valid contract? Why is it important for an accountant or businessperson to know this?

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Solution Summary

The solution first lists seven elements of a valid contract. Then there are six reasons listed for why it is important for business people to be able to understand and apply the concepts.

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Valid elements of a contract include

1. An offer
2. An acceptance
3. Consideration
4. Promise to perform or pay
5. A legal purpose
6. Between competent people
7. Free will

Note that a contract does not have to written to be enforceable. State laws called the 'Statutes of Frauds' list the ...

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