What is legal agreement is a common question among those who are unfamiliar with contract law, and the legal protections of a written agreement.

Specifically, a legal agreement is a written document that will identify the parties’ roles and responsibilities under the agreement. Once the written document is signed, either manually, digitally, or electronically, the document becomes legally binding. This means that if either party fails to perform his or her duties under the agreement, he is in breach of contract.

In addition to the above, there are many other examples of legal agreements that we are all familiar with, including the following:

  1. Contracts for the purchase of large items, such as appliances that are being delivered from large appliance stores.
  2. Wills
  3. Healthcare contracts
  4. Driver’s licenses
  5. License to practice law or medicine

When we purchase large ticket items, such as a set of appliances, we generally enter into a contract with the store to deliver and install such appliances. These agreements are legally binding on both parties. Furthermore, if you have ever written a will, this is actually a legally binding agreement. Similarly, healthcare and other insurance-related documents are legal agreements between the insurance provider and you identifying your rights under the agreement, along with yours and the company’s responsibilities in terms of coverage and fees.

Driver’s licenses are also legal agreements entered into between you and the state where the DMV is providing the license. Essentially it states that you can legally operate a motor vehicle.

Professional licenses also include legal agreements that will indicate if a professional is licensed in a particular area, which might be medicine, law, engineering, etc.

Legal agreements might also include limitations on what you can do with regard to a particular area. For example, a court can issue an order indicating that you must leave the premises where you live due to non-payment. This basically states that you are being evicted from the premises due to non-payment over a period of several months or years. This legal agreement provides that you must leave the property by a specific date or you can be physically removed from the premises.

Even arrest warrants and restraining orders are considered legal agreements in that they prevent, prohibit, or limit a person in what he or she can do.

Contract Formation

A contract is formed between two parties who agree to provide some sort of service or delivery of goods in exchange for money. The contract, or legal agreement, is formed when the following elements are met:

  1. Offer
  2. Acceptance
  3. Consideration
  4. Mutual assent
  5. Legal capacity

With regard to contract formation between such parties, one party generally initiates the formation of the contract by making an offer to the other party. After that, the receiving party must accept the offer as is. Once this happens, the parties will need to exchange something of consideration. This can be something of monetary value or a promise to perform under the contract.

Thereafter, the parties will have to prove mutual assent. If one of the parties was forced or coerced into the contract, then mutual assent doesn’t exist, and the contract is not legally binding or enforceable. Lastly, the parties must prove that they are both legally capacitated. If the parties are under the age of 18, mentally incompetent, or under the influence of drugs or alcohol at the time the contract was signed, the parties are not deemed legally capacitated.

Keep in mind that not all contracts involve a formal offer and acceptance in the way you might think. As noted above, many legal agreements are one-sided, forcing the party to abide by the terms identified in the legal agreement. This is especially true for those legal agreements preventing, prohibiting, or forcing one of the parties to do something.

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