Offer and acceptance is the critical factor when considering what is a valid contract.
If person A offers to do something and person B unconditionally accepts that offer and communicates the acceptance to A, then there is a concluded agreement. However, if A makes an offer and B responds with a counter-offer, there is no agreement and neither party is bound.
Every day we enter such simple contracts at the supermarket or newsagency or on the internet. Most contracts are not written but are verbal. There are some contracts which, by law, must be in writing (such as an agreement for the sale of land), but agreements can, in certain circumstances, be oral as well as written. An additional facet is what is called “part performance,” which is where one party performs or partly performs an agreement, and the other party accepts those actions. In this case there is a contract. Some essential ingredients of a contract are:
• a concluded agreement between the parties
• an intention that the agreement be legally binding
• some benefit must be given by one party to the other (this is called consideration)
• the consent of the parties must be genuine, that is not mistaken nor under duress
• the parties must be legally capable of entering into the agreement
• the purpose of the contract must be legal.
Generally, anyone over 18 has legal capacity to enter into a contract, but there are limitations regarding people with intellectual disability or mental illness. Credit contracts and agreements regarding land must, by law, be written. Otherwise, valid verbal agreements will be enforced by the Courts. Contact us at Matthews Williams on this or any other legal matter.