Legality in contracts is deemed to be an enforceable, a mutual agreement between two competent parties, with all parties freely engaged in the agreement.

What is a Contract?

A contract, which may be written or oral, is an agreement between competent parties engaging in mutual commitments enforceable by law. Legality is an involved warranty that an agreement or contract strictly follows the law of a particular jurisdiction. For example, for insurance contracts, the assumption is that all involved risks are covered under the policy are legal ventures. When involved with business agreements, the first consideration is to check if the agreements or promises indicated in the contract are enforceable by law. When dealing with contracts, "party" may mean an individual, company or a corporation.

As stated, contracts contain promises to be enforced under law. The need for a contract arises if a duty comes into existence because one of the parties made a promise. If by any chance, a promise on a contract is breached, remedies are offered to the harmed party. It could be in a monetary form or specific performance of the promise on some circumstances.

The increasing use of a contract known as "Contracts of Adhesion" (or form-contracts) is a recent concern that emerged in contract law. This type of contract gives the ability for the stronger party to force the terms to the weaker party. Some of the examples are lease contracts, mortgage agreements, and even sign-up agreements and online purchases.

Types of Contract

There are a few types of contract including:

  • Unilateral Contracts: This type of contract requests performance instead of a promise from the party accepting the offer. The contract comes to life when the requested performance is complete. A reward system is one of the numerous examples of a unilateral contract where payment in form or monetary is offered in return for something valuable or exchange for information. Insurance contracts are also of this type.
  • Bilateral Contracts: This type is a widely used kind of contract. It is a type of contract that most people consider as traditional – an exchange of promises mutually approved by the parties involved. Since it's mutual for all parties, both parties make a promise on the contract.
  • Express Contracts: Another type is an express contract where agreements and its terms are expressed explicitly by language, either written or spoken.
  • Implied Contracts: Implied contracts require no obvious offer expressed in words or writing.

Elements of a Contract

For a contract to be enforced by law, it should have a legal purpose. A contract that would engage in illegal or immoral activities would not be enforced by courts. In addition, both parties involved must be of legal age, competent and in the right state of mind, and not under the influence of drugs or alcohol. If you engage in a contract with a person under legal age or that is mentally ill, the contract will not likely to be enforced.

During disputes, the court initially decides if an agreement forms a contract or not. For an agreement to constitute a contract, it should have a valid acceptance of the offer, sufficient consideration, capacity, and legality. The offer allows an individual or business to expect that the other party is willing to be bound by the offer on the terms proposed. Terms that go with the offer should always be definite and certain.

If mistakes have been encountered or made by at least one of the parties, the contract might not be enforced. It will also be voided if one of the parties fraudulently or forcefully influences another. In some states, a valid substitute can satisfy the elements of consideration.

Enforcement and Contract Defenses

A contract might not be enforced by a court based on few reasons, called defenses to the contract. It is designed to keep the fairness in maintaining the substance of the contract during the bargaining process. If a valid defense is present, the contract may be annulled by the party who was the victim of the unfairness. 

Consulting with a skilled business attorney to ensure that your contract is valid is a good thing to consider if you have concerns with regard to the enforceability of your contract. You can also ask the assistance of these professionals when drafting your business contracts.

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