Law of Contract: Elements of a Contract

¶ … Contract

Elements of a Contract

The Contract: Overview

Fabulous Hotel has engaged my services as an employee (my position being that if head chef) under an employment contract that spans two years. Two years down the line, another hotel could be interested in my services. The problem is; the employment contract cited above has a paragraph that reads as follows:

"The below-signed agrees not to work as a chef for another hotel in the same metropolitan area for a period of two years after leaving our employ."

Of key importance in this case is whether the said contract is enforceable. What are the elements that this particular contract must meet for it to be enforceable? Are there any circumstances where this agreement would be unenforceable? These are some of the issues that will be addressed in the subsequent sections of this text.

Elements of a Valid Contract: Discussion in Relation to the Aforementioned Scenario

A number of elements must be present for a given agreement to be recognized as a contract. What this means is that if any of the said elements is missing or absent, then the agreement cannot be deemed as a contract, at least from a legal perspective. The five elements of a valid contract identified by Seaquist (2012, p. 138) include "offer, acceptance, consideration, capacity, legality." I will highlight each of these elements below.

Offer

Two of the parties mentioned in this case are the offeror and the offeree. These according to Seaquist (2012) are the two key parties involved in the formation of a contract. Here, one of the two parties mentioned promises to either engage or refrain from engaging in some specified action either on commencement of the contract or at some point in the future. It is the offeror who makes an offer and hopes or waits for the same to be accepted or rejected by the offeree. In that regard, therefore, an offer is merely an expression of the offeror's willingness to enter into a contract. It therefore follows that if accepted, as I will indicate below, he who made the said offer will be bound by the same. It is also important to note that according to Seaquist (2012), two other things (in addition to rejection and acceptance) could take place after an offer is made. The offer could either lapse or be revoked. Lapsing according to the author "refers to the fact that an offer does not last forever" (Seaquist 2012, p. 142). In that regard, therefore, depending on the situation, the offer could expire after the passage of a given amount of time. Revocation is simply the move by offeror to take back the offer. For this to be effective in law, however, it should take place before acceptance takes place.

Acceptance

An acceptance in the words of Twomey and Jennings (p. 271) "is the assent of the offeree to the terms of the offer." In most cases, the said acceptance could either be done orally or in writing. In that regard, therefore, it is the acceptance of the offer (by the offeree) made by the offeror that constitutes what is known as an agreement. Some authors see offer and acceptance as being joined at the hip. In the agreement to establish a contractual relationship therefore, "one party must offer to enter into a legal agreement, and another party must accept the terms of the offer" (Miller, p. 192).

Consideration

This is yet another important element of a valid contract. According to Miller and Jentz (2007), "any promises made by parties must be supported by legally sufficient and bargained-for consideration." This as the author points out could be something of value promised or received with an intention of convincing the individual or entity in question to make a deal. From the author's assertion above, the consideration should in this case originate from the promisor. Forms or examples of consideration include, but they are not limited to, goods, services, and money.

Capacity

Capacity according to Seaquist (2012) has got to do with the mental state of the contracting parties. In the words of the author, "a party who lacks capacity does not have the ability to understand the consequences of entering into a contract" (Seaquist 2012, p. 145). In this case, two things are often taken into consideration. These include mental competence and age. In that regard, therefore, parties entering into a contract as Miller and Jentz (2007) point out ought to have the contractual capacity to enter into the said contract. Those who do not, or may not, have capacity to enter into contracts include intoxicated or mentally disordered persons and minors.

Legality

The very last element in this case is legality. According to Miller (2011), a contract ought to be entered for legal purposes, i.e. To accomplish a legal undertaking. Therefore, a contract that goes against public policy or is illegal in some way cannot be deemed valid. It is however important to note that "an illegal contract is one that is defined by the law of its state as being illegal" (Seaquist, 2012, p. 147). Other contracts that may be viewed by some states as being illegal include, but they are not limited to, non-competition contracts that are overly broad, and contracts that fail to adhere to specific licensing requirements (Seaquist 2012).

2. Common Law Contract

The contract in question, as defined elsewhere in this text, is governed by common law. This is particularly the case given that it involves personal services. As the head chef of Fabulous Hotel, the said entity has essentially hired me as an employee. According to Seaquist (2012), "examples of common law contracts" include insurance, real estate, and personal services such as hiring an individual as a professional or employee. In that regard, therefore, the contract I signed is governed by common law.