Legality of Contract: Everything You Need to Know
If you are wondering about the legality of a contract you have entered into, an experienced attorney can provide you with some guidance.3 min read
If you are wondering about the legality of a contract you have entered into, an experienced attorney can provide you with some guidance. After all, many of us have either drafted or signed a contract, but later on, questions may arise as to whether or not it can be legally enforced. As such, it is important to know in advance what the legal implications may be. If you are the one creating the contract, you will want to ensure that you are protected, and if you are the one signing it, you will want to ensure that everything is on the up and up.
Legally, a contract can be either written or oral, but it is far easier to enforce a written contract, for obvious reasons: the specifics of the contract are right there in black and white, as opposed to having to take someone’s word on what the contract may or may not have stipulated. A legal contract ultimately sets forth a set of promises between two or more parties, often with all parties benefiting in some way. Often times, a legal contract is essentially an exchange of services, or promise for services rendered.
What Should Be Included
A contract may contain any amount of information, but for you to ensure that it is going to be legally binding, it should at least contain the following information:
- The legal purpose. This means that the activities spelled out in the contract cannot be illegal. For example, should you hear the expression, “contract killer”, this is obviously an example of a “contract” without a legal purpose. As such, should one party not uphold their end of the contract, the other party cannot take legal action.
- There must be a mutual agreement. This is easy enough to define, as it basically means all of the parties entering into the contract are in full agreement as to its terms.
- Consideration. This means that there is valid exchange of some type taking place, resulting from the contract; that it is not somehow one-sided. For example, if you hire someone to build a website for you, and in return you are going to pay them a certain amount, therein lies the consideration; they build the website, you pay the money.
- All parties must be competent. Again, this is also easy enough to understand, as only someone who is of sound mind and body, and over the age of 18 may enter into a legal contract. Additionally, if one of the parties is under the influence of drugs, alcohol, or any other mind-altering substance, they are not capable of providing legal consent, which may also serve as grounds for nullifying a contract.
- Genuine Assent. This ensures that all parties entering into the contract are doing so willingly. Should there be evidence of coercion, such as threats or blackmail, a contract may be deemed null and void.
Types of Contracts
- A bilateral contract is one in which both parties are making a promise of some kind. Most contracts are ultimately considered to be bilateral. For example, if you hire someone to paint your house, you are entering into a bilateral contract, as you are making a promise of payment in exchange for your house being painted.
- A unilateral contract is defined as one in which a promise is made in exchange for action on the part of the other party. Generally speaking, insurance policies are considered to be unilateral contracts, as when you purchase a policy, you make your regular payments with the promise that the insurance company will pay your policy, if and when it is necessary.
Breach of Contract
An unfortunate reality is that sometimes we may experience a breach of contract in our dealings with people. A breach of contract occurs when one of the parties who entered into the contract does not uphold their end of the agreement. For example, if you hire a photographer to photograph your birthday party and they either do not show up or do not provide you with proofs of your photos by the agreed upon date, a breach of contract has occurred. On the flip side, a breach of contract also exists if the photographer does everything they are supposed to as set forth by the contract, but never receives payment.
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