New Hampshire Contract Law: Everything You Need to Know
New Hampshire contract law involves the same elements as general contract law.3 min read
2. Who May Enter a Contract?
3. Business Contracts
New Hampshire contract law involves the same elements as general contract law. A contract is an agreement between two or more parties that generates a legal responsibility to do (or not do) at least one specific thing. To be legally enforceable, a contract must include two or more legally competent parties, consideration, and mutual assent.
What Are the Elements of a Contract?
For a contract to be legally enforceable, it must contain the following elements:
- Competent parties — Each party must have the mental capacity to understand the agreement at hand. Most individuals and companies have legal competency. For more details, read the next section, "Who May Enter a Contract?"
- Consideration — Consideration is broadly defined as the motivation for the agreement. It could be the cause, reason, material benefit, interest, motive, price, compensation, or whatever else that warrants an agreement, as determined by the parties entering the contract.
Each party must receive valuable and identifiable consideration, or else the exchange is considered a gift, rather than a contract that can be enforced. The most common type of compensation is money, but it may also be making a promise to do or not do something, property, or giving up a claim to something. Illegal acts are not permitted within legally binding contracts and, if contained within the contract, will void it.
- Mutual Assent (or Meeting of the Minds) — Each party must understand the contract's important details, obligations, and rights. It's helpful to put the deal into writing prior to signing it, so that each party can clearly see the terms and maintain a copy of the contract.
It's harder to prove what exactly the contract terms were if they are not in writing. However, it's not necessary to have the contract in writing in order for it to be legally enforceable. Mutual assent can be expressed by spoken words, gestures, or may be inferred from the context of the situation. Mutual assent is not valid if one party is obviously joking, if no actual agreement between both parties is made, or if both parties have made a material mistake as to the details or terms of the agreement.
Who May Enter a Contract?
Each state defines what is required in order to be considered mentally competent. In general, a minimum age and mental capacity are required, to ensure that one is fully able to understand the terms of a contract.
In New Hampshire, the age of majority is 18, which is required to be considered competent. If a minor tries to enter a contract, a court may refuse to enforce it. However, a minor may enter a contract with parental consent, or if they need necessities of life, such as clothing or food, or for student loan contracts. In addition, New Hampshire defines mental capacity as a person's capacity to understand their own actions and to appreciate the consequences of forming a contract.
Mental capacity may be interpreted in various ways, but generally, a mentally impaired person or any person who has been drugged is considered mentally incapable. Aside from minors and the mentally incompetent, people are generally assumed to have the power to enter themselves into binding contracts.
Corporations also have the ability to enter into contracts, but may only do so by particular employees who have the authority to bind the company into a contract. If you are dealing with an individual and have doubts about whether they have the authority to enter into an agreement with you, request that the corporation's president review and sign the contract. Typically, the people associated with corporate contracts are not themselves responsible for the company's debts or liabilities, including breach of contract.
Whether a business contract or a contracted associated with a personal matter, the agreement must be drafted in a distinct and legal way. The language needs to be clear (plain English) and the contract details must be organized in a way that both parties understand and can agree upon. A certain contract format exists, which, if deviated from, can cause confusion and misinterpretation. Specific contract terms and details must be negotiated between all parties before the agreement can be signed and put into effect.
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