All valid contracts have to follow some basic rules. At its most basic a contract is formed when one party makes an offer of an exchange of value to another party, who accepts the offer. The legal elements of a contract include mutuality of obligation, which is comprised of offer and acceptance, definite terms, and consideration. These elements must all be present in order for a contract to be enforceable. In addition, the contract must have been made for a legal purpose and all parties involved must be competent. The negation of one or both of the latter two requirements – legal purpose and competence – can also render a contract unenforceable but are not usually considered as part of the basic elements of a contract.
Mutuality of Obligation
Mutuality of obligation, or meeting of the minds, means that the parties to a potential contract must agree on the specifics of the bargain. Mutuality of obligation is demonstrated by an offer by one party and acceptance of that offer by another.
An offer is defined as a manifestation of willingness to enter a bargain. This manifestation must be made in a way that justifies another person in understanding that if he or she accepts, the bargain is concluded. Simply put, when someone proposes an exchange to another person, that is an offer.
Acceptance is a manifestation of assent to the terms of the offer and can be made in a number of ways. If the offer specifies a manner of acceptance, the person being offered the bargain (the offeree) must accept in that fashion. Sometimes, the offer can be accepted by a return promise or by actual performance of the promised act. Courts now generally find acceptance can be by any reasonable means under the circumstances unless the language of the offer indicates otherwise.
An offer that allows the offeree to accept only by a promise is called a bilateral contract. A bilateral contract is considered formed when the offeree promises to perform some obligation in the future. If the offeree never performs the obligation, then there has been a breach of contract because the promise to perform was acceptance of the offer.
An offer that requires the offeree to accept by performance of the promise is called a unilateral contract. If the offeree never performs, there is no breach of contract because there was no contract. The contract was never accepted as indicated in the offer.
Generally, silence cannot constitute acceptance. However, if the parties have prior dealings in which silence was the method of acceptance or if the offeror has indicated that acceptance can be made by silence, then silence will suffice.
A contract is only binding if a court can look at the bargain and determine the parties’ obligations. The terms of the contract must be reasonably certain. The theory behind this is that the parties could not have formed a contract without agreeing upon the material terms of that contract. This element is sometimes considered as part of the offer.
Consideration is what the parties exchange that is of value. A promise must generally be supported by consideration in order to be enforceable. Consideration can be many things. It can be a benefit, profit, or, alternatively, some loss or responsibility that is incurred or assumed. It does not have to be money. Courts will not usually judge the adequacy of consideration. However, they will ensure that what was exchanged (or promised to be exchanged) had some value. In addition, the exchange at issue must have been bargained for by the parties.
So, there are many guides to contract writing, but there are some key elements that all contracts require, including:
- Intent to make a contract;
- A lawful subject matter;
- An offer made by one party;
- Acceptance of the offer by the other party;
- An exchange of something of value;
- A written agreement, in some circumstances.
Lawyers That Specialize in Contracts
Lawyers who specialize in contracts are familiar with every aspect of the contractual process and are instrumental in protecting their client’s bottom line. These lawyers understand the implications of express and implied terms contained in written agreements and also know the best way to enforce them should a party to the contract fail to perform the obligations under it. Consequently, these specialist lawyers are instrumental in drafting, reviewing and enforcing contracts on behalf of their clients.
A lawyer who specializes in contracts is usually knowledgeable in business and capable of grasping the needs of the client even in the most complex arrangements. Contracts underlie almost every aspect of business life including purchasing and selling goods and services, transportation, storage, employment, intellectual property rights protection and so on. Therefore, the specialist contract lawyer plays the vital role of creating a contract that effectively protects his client’s rights and interests. Furthermore, in reviewing a contract between the client and the other party to the contract, the lawyer is able to advise clients on any loopholes that could later present problems. If there is a breach of contract, the specialist lawyer can effectively protect clients in court due to her knowledge of contract enforcement.
Specializing in contracts requires lawyers to cultivate specific skills such as research, writing and negotiation. A good contract lawyer is aware of the laws and regulations that apply to specific contractual arrangements and also is aware of the latest decisions from the courts regarding a particular area of law. The ability to research and remain aware of legal developments enables the lawyer to draft and approve air-tight contracts. Writing is also a necessary skill for specialist contract lawyers because it is through their words that they communicate their client’s position. These lawyers are well-versed in various templates, wording and clauses that characterize good contracts. Lawyers who specialize in contracts are good negotiators since it is their duty to adequately represent their client.
To specialize in contracts, a lawyer needs to be exposed and competent in various aspects of contract law. The contractual process begins with definite agreement between or among the parties, which is then reduced into writing using clear, unambiguous wording in a contract that covers every eventuality that could arise from the arrangement. An experienced lawyer not only has mastery of the law which he applies throughout the creation process but also has insight on foreseeable issues that could arise and guards against those in finalizing the contract. Furthermore, an experienced contract lawyer also knows to make provisions for alternative dispute resolution methods based on her awareness of the lengthiness and complexity of litigating matters in court.
Lack of correct setting up of contracts and documents by professional lawyer in commercial and economic transactions is reason for the increasing of claims in the courts. It is important that setting up a contract is highly professional affair and any lawyer can not necessarily setting up a contract. Department of contracts and documents belonging to Dadpooyan Hami International Law Firm with utilizing lawyers and legal advisors could codify and prepare types of your internal and international contracts in order to preventing disputes and diminishing claims in judicial and administrative authorities. You with utilizing professional lawyers and legal advisors could protect yourselves rights in contracts and in judicial authorities.
Most Important contractual services conclude:
- Participating pre-contract negotiations and setting up draft of mutual and multiple contracts and supplying credit in regional and international level
- Setting up types of trade contracts, civil, participation, banking, agency, credit, investment, contracting and engineering contracts, oil and gas and petrochemical, license contracts, Franchise, joint venture, consortium, construction and utilization and technology transfer
- Consultation and attorney about process of pre-contract, concluding and cancelling contracts, cancelling and arbitrating contracts.
- Consultation and attorney about contractual guarantees and conditions of modification and implementing it.
- Interpreting international contracts with observance of international precedents and usage and determining law governing international contracts by identify rights of parties