1. Offer. An offer may be oral or written as long as it is just not required to be written by law. It is the definite expression or an overt action which begins the contract. It’s simply what’s offered to another for the return of that person’s promise to act. It can’t be ambiguous or unclear. It have to be spelled out in terms which can be particular and certain, such as the identity and nature of the item which is being offered and under what conditions and/ or terms it is offered.
2. Acceptance. As a common proposition of law, the acceptance of the offer made by one party by the other party is what creates the contract. This acceptance, as a normal rule, cannot be withdrawn, nor can it fluctuate the terms of the offer, or alter it, or modify it. To take action makes the acceptance a counter-offer. Though this proposition might differ from state to state, the overall rule is that there are no conditional acceptances by law. In actual fact, by making a conditional acceptance, the offeree is rejecting the offer. However the offerer, at his choosing, by act or word which shows acceptance of the counter-supply, will be sure by the conditions tendered by the offeree.
3. Consideration. Consideration for a contract could also be cash or may be one other right, interest, or benefit, or it could also be a detriment, loss or responsibility given up to somebody else. Consideration is an absolutely needed element of a contract. As a word of caution, it must be noted that consideration must be expressly agreed upon by each parties to the contract or it should be expressly implied by the phrases of the contract. A potential or accidental benefit or detriment alone wouldn’t be construed as valid consideration. The consideration should be explicit and sufficient to support the promise to do or to not do, no matter is applicable. Nevertheless, it needn’t be of any particular monetary value. Mutual promises are adequate and valid consideration as to every party as long as they’re binding. This rule applies to conditional promises as well. As additional clarification, the overall rule is that a promise to behave which you’re already legally sure to do will not be a ample consideration for a contract. The courts determine the application.
4. Capacity of the Parties to Contract. The final presumption of the law is that all individuals have a capacity to contract. An individual who’s making an attempt to keep away from a contract must plead his or her lack of capacity to contract towards the party who’s making an attempt to enforce the contract. For instance, he would have to prove that he was a minor, adjudged incompetent or drunk or drugged, and so forth. Often this is the most tough burdens of proof to overcome due to the presumption of one’s ability to contract.
5. Intent of the Parties to Contract. It’s a primary requirement to the formation of any contract, be it oral or written, that there needs to be a mutual assent or a “assembly of the minds” of the parties on all proposed phrases and essential elements of the contract. It has been held by the courts that there can be no contract unless all of the parties involved intended to enter into one. This intent is set by the outward actions or actual words of the parties and never just their secret intentions or desires. Subsequently, mere negotiations to arrive at a mutual agreement or assent to a contract would not be considered a proposal and acceptance even thought the parties agree on among the terms which are being negotiated. Each parties should have supposed to enter into the contract and one cannot have been misled by the other. That’s the reason fraud or sure mistakes can make a contract voidable.
6. Object of the Contract. A contract shouldn’t be enforceable if its object is considered to be illegal or in opposition to public policy. In many jurisdictions contracts predicated upon lotteries, canine races, horse races, or different forms of playing can be considered illegal contracts. Yet in some states these types of contracts are valid. Federal and some state laws make contracts in restraint of trade, price-fixing and monopolies illegal. Subsequently, a contract which violates those statutes could be illegal and unenforceable. This is true for drugs and prostitution or any other activity if considered criminal.
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