Essential elements and defenses in contract formation

¶ … Contracts

Elements needed in order for a contract to be formed

The essential aspects of contract that make it legally binding contract are; there must be an offer and acceptance in that the offer by one party is accepted by another party. Intention to create a legal relation, the contract will not be valid only on the basis of only there being an agreement, but also on the intention to getting into the legal agreement. There other element is consideration which refers to the price paid by the one party for the promise of the other party. Legal capacity is yet another element in forming a contract, those with mental impairment, minors, bankrupts, corporations and prisoners are not able to get considered as having legal capacity to get into a contract (Fitzroy Legal Services, 2012).

Conditions for an offer to be valid/legal sufficiency

There however are situations where a contract can be breached and a defense be poised for such a breach. The various defenses that can be poised for breach of contract include lack of having actually formed a contract due to lack of offer, acceptance, mutuality of obligation, consideration or even writing. These must be observed for an offer to be considered a valid offer. Lack of capacity to enter contract is another defense, incompetence, insanity or intoxication at the time of the contract formation are yet other defenses. It is therefore important to ensure that the parties getting into a contract, both the party giving an offer and the one accepting the offer are in the sound mind possible and sober. The other defenses afforded to defendants are unconscionability, fraud, mistake, undue influence as well as duress (U.S. Legal, 2010). There is need to ensure that there is no fraud involved at the signing of the contract for the offer to be valid.

The offer must also be accepted in person by the parties that have agreed willingly to get into the contract. The offer cannot be accepted on behalf of the person. For instance when A and B. gets into a contract, only B. can accept the offer and not C. However, during the process of contract creation there is the aspect of express agency. This is direct authority that an agent has. In cases where an agent relationship has to be determined, there are two parties involved; the principal and agent. The agent acts on behalf of the principal an agent therefore has a legal power to bind the principal. A principal should be very careful when it comes to the type of authority they give to an agent (The 'Lectric Law Library, 2013).

Remedies in a contract case

There are various remedies to a breached contract; the first is to sue for compensation in terms of money for the damages, equitable relief which demands specific performance or performance of the act promised in the contract, restitution is another remedy which is essentially the court trying to amicable return the involved parties to the position they were in before the contract, waiver of breach is also applied at times (Erick Goldman, 2003).

Ways an offer can end

There are various ways in which offers in a contract can come to an end; through accent, outright refusal, re-negotiation of the contract, making a contingent plan, through a compromise on the term of the contract, having a counter offer, death of the promisor and others like elapsing of reasonable length of time.