Contract Is a Legal Document Where Two

Contract is a legal document where two or more parties jointly agree that there will be a trade of goods and/or services through a unilateral or a bilateral exchange. An effective contract will be made up of six major elements that specify how goods and/or services will be exchanged, how the exchange will be compensated, and establish a timeframe for the exchange. It is suggested that a contract include details as to how any breach will be dealt with and include a clause that will detail how the contract can be terminated. An enforceable contract is made up of six elements and will also detail how and when a contract will be fulfilled or voided.

A contract is made up of six essential elements that include offer, acceptance, objection, mutuality of obligation, consideration, and competency. The first thing that must be accomplished in creating a contract is to define the offer; an offer will determine the contract's purpose and what goods and/or services are to be exchanged. The offer is defined as "an expression of willingness to contract on certain terms, made with the intention that [the terms] shall become binding as soon as it is accepted by the person to whom it is addressed" (Treitel, 2007). Once the terms in the offer are satisfactory to all parties, acceptance can occur. Acceptance, also known as genuine assent, depends on all parties agreeing to identical terms. The terms that are defined by the contract are non-transferable and unless there is a provision in the contract, they cannot be subcontracted to a third party. One of the most important elements of a contract is legality. If any of the terms that are set out in the contract are illegal in any way, then the entire contract loses validity and enforceability.

Additionally, for a contract to be enforceable, mutuality of obligation has to be established between contractual parties. Mutuality of obligation is defined as a "mutual agreement and assent to the expression of the [contracting parties'] argument" (Legal Elements of a Contract, n.d.). Consideration will define the terms of the contract. Like legality, competency is a very important element in making a contract enforceable. A contract's enforceability depends on the competency of the parties that enter into said contract. If any of the parties that enter into the contract are not competent, the contract can be deemed null and void (Legal Elements of a Contract, n.d.).

Moreover, just as there are key items that make a contract enforceable, there are legal defenses that can be used to get out of a contract. Legally, a contract can be voided if all consenting parties communally agree to revoke the contract once the terms have been fulfilled. Additionally, a contract can be legally voided through lapse of time, destruction, and as stated above, incompetence and/or illegality.

Defenses to a contract can help to determine if a contract is void or if it can be voided. Defenses include incapacity, mistake, duress, undue influence, unconscionability, and fraud/misrepresentation. A contract can be voided if there is proof provided that one any of the parties that entered into a contract were incapacitated by intoxication, mental instability, or illness (Legal Defense to a Breach of Contract Claim, 2011). Being under duress or undue influence is also a legal defense to a breach of contract. Duress can occur if any of the parties were threatened with physical violence, extortion, or if they were forced to enter into the agreement. Additionally, a contract is not enforceable if either of the parties knew that there was a mistake present or did nothing to amend said mistake. If any parties know that a mistake is present, "knowledge of the mistake will be imputed to each party" (Breach of Contract: Defenses, 2010). Misrepresentation and/or fraud are defenses because entering into a contract under these conditions is illegal.