An Explanation of Contract Law

A detailed Summary of An Explanation of Contract Law

In today's business world of promises and actions, sometimes contracts must be made in order to deem those promises legally binding, and that, simply put defines a contract. In general a contract is a legally binding promise (West 198). But what constitutes a contract?

Contracts are simple to understand but involve many aspects which may make the concept of contract law a bit difficult to grasp. Perhaps the best way to begin explaining contracts would be to present the four elements of a valid contract (Emerson and Hardwicke 81). According to Barron's Business Law on page 81, the following four elements constitute a contract.

1. Capacity. Both parties must possess the capacity to enter into a contract. Whether a contract is verbal or written, both parties must be fully capable of understanding the terms of the contract.

2. Consideration. There must be a value exchanged for a promise. In other words one party agrees to a certain set of terms at a certain price.

3. Legality. The good or service being exchanged must be legal. For example, a contract with a drug dealer and a user based on credit terms would not stand up in court because drugs, obviously are not legal.

Minors are also an exception to the laws of contractual capacity. At any point in a contract, a minor has the right to deem his contract void. Say for instance a minor sells his bicycle and his father's gas-powered string trimmer to a friend's father, when he learns his father is very disappointed at the disappearance of his items he ask for the products back in return. Since the selling party was minor he could break the contract and step over the lines that state the purchaser owner and have the products taken back (Emerson and Hardwicke 115).

Legality is just as the word states. If the subject matter of the contract is not legal then no contract can be made that will be supported in a court of law. If the subject matter of a contract is not legal then neither party could take the case of the contract to court and expect any assistance (Barron 117).

The second element of contract law is consideration. Consideration is the value of something being exchanged for a promise. Consideration is based on the Latin principle known as quid pro quo which translates to "something for something.( Emerson and Hardwicke 93)" Consideration must be present in a contract in order for the contract to be enforceable. "A contract cannot be one-sided; it exists only if there is a promise or an action (or nonaction) on each side.(Barron 92)" Usually the adequacy of consideration will not hold up in court. If one hires someone for a service and the total bill is twelve-hundred dollars but the customer only pays eleven-hundred dollars as the full payment and the handyman accepts. If there is not dispute over the difference than the consideration is thought to be adequate (Barron 93).

The most basic elements and types of contracts have been evaluated. Contracts are a part of the law used when two minds meet and make an agreement (Emerson and Hardwicke 82).

Mutual agreement is the last element of contracts. In order for a contract to be binding, both parties must agree and a

Some common words found in the essay are:
Emerson Hardwicke, Business Law, Paul Smith, Contract Law, Dr Smith, Bobby Smith's, Bobby Smith, Suppose Smith, Emerson Hardwicke116, Mutual Agreement, emerson hardwicke, contractual capacity, business law, contract contract, contract law, unilateral contract, barron's business law, legally binding, type contract, contract emerson, barron's business, contract emerson hardwicke, contract express contract, suppose paul smith, value exchanged promise,

Approximate Word count = 1341
Approximate Pages = 5 (250 words per page double spaced)

Category: Miscellaneous