An Experienced Attorney Serving The Detroit Metro Area

Elements of a contract

Elements of a contract

Understanding the elements of a contract is important to enforcing a contract. Because of the disruption a contract breach can cause, it is helpful to be familiar with what makes a contract valid and the legal resources available following a contract dispute.

Basic elements

Some types of contracts require more elements, but the basic elements all valid contract require include:

  • The offer: A contract relationship begins with an offer for goods or services. It can be an offer to do something or refrain from doing something. The offer must be clearly stated.
  • Acceptance: Acceptance is an agreement to the offer. The party accepting the offer needs to agree to the conditions of the offer. The party accepting the offer cannot be under dress when they accept it.
  • Consideration: Consideration is what the parties will get from the contract which can be money or something else. Consideration is typically something of value and is what one party will pay to complete the contract.
  • Legal intent: The parties must have legal intent to enter into the contract and for the contract to be binding.
  • Competency: The parties must be competent to enter into the contract. Having competency to enter into a contract means that the parties are of legal age to enter into a contract, usually age 18; the parties have mental capacity to understand what they are entering into; and are not impaired by drugs or alcohol, or otherwise, at the time of signing.

In addition to these elements, the content of the contract must be legal for the contract to be valid. When a contract dispute comes up, it is helpful to be familiar with the elements of a contract so that nonbreaching party can determine if they want to enforce the contract or potentially pursue other contract remedies and damages that may be available to them.