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DETAILS MATTER. ESPECIALLY IN LEGAL AGREEMENTS

Published: 12 Jul 2021

Have you ever wondered if that contract you were reading actually needed all those legal terms?  Every term, condition, and individual facet of a legally binding contract can make a world of difference. Wording can make or break obligations, definitions can simplify the language or cause confusion, and missing or included elements can be the difference between a valid or void contract.

A null and void contract is an illegitimate agreement, making it unenforceable by law.  Null and void contracts are never actually executed because they are missing one or more of the required elements of a legal agreement.  To draft a valid contract, you need to understand the necessary elements of a contract, what makes a contract void or voidable, and how to terminate an agreement.

Elements of a Contract:

A contract must include the following six elements to be legally binding and enforceable:

  1. Capacity: Contractual capacity refers to an individual’s ability to enter into an enforceable contract. People who are under age, mentally disabled, or intoxicated provides for lack of legal capacity and can not be held liable for their end of the agreement. They can choose to move forward with the agreement if they wish, but they can also exit the contract at any time without breaching. 
  2. Offer: An offer is the initial draft of a contract that includes the terms of the contract to which the person you are entering into an agreement with is willing to be bound.  Most offers include a promise to act or not act in a certain way or an exchange of promises.  If the offer is accepted and signed, it becomes legally binding at that moment.
  3. Acceptance: Acceptance is an agreement to abide by the terms and conditions in the contract.  An offer’s acceptance must be made by the person who is accepting the offer.  If the offer is not accepted, then the person not accepting the offer can make a counter offer and the process then starts over with that new offer and the acceptance of that new offer.
  4. Legality: Legality simply refers to whether or not the terms, conditions, and the overall agreement abides by law.  If the subject matter of a contract is not legal, it is not enforceable.  For the agreement to be valid, the transaction must be legal. 
  5. Consideration: Consideration is the exchange of one thing for another.  Contract law states that both parties in the agreement need to provide something of value for the agreement to be valid.  Consideration can include money, an item, or completing a certain action or service for someone. 
  6. Mutuality: Mutuality is a contract element that states both parties need to be bound to the agreement for it to be valid.  If one party is not legally bound, then neither are.  The agreements that lack mutuality are not valid contracts.

For more information on how to legally start and grow your business please visit my website at www.BaglaLaw.com

Disclaimer:  This information is made available by Bagla Law Firm, APC for educational purposes only as well as to give you general information and a general understanding of the law, and not to provide specific legal advice. This information should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

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Kelly Bagla

Firm: Bagla Law Firm, APC
Country: USA - California - California

Practice Area: Business

  • 5857 Owens Ave, Suite 300
    Carlsbad,
    CA 92008


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