Words or deeds can be used to accept an offer. This can take several possible forms: conditional acceptance (when the addressee accepts the offer under certain conditions that must be fulfilled before the conclusion of the bilateral contract), acceptance by action (by performing the actions specified in the offer) and option agreement (when the addressee pays for the bidder to keep the offer open for a certain period of time). There are several essential elements of a contract that need to be considered. This includes the identification of the parties, by which participants can be recognized. Another element is the right of each party to ensure the fairness of the transaction, as well as a description of each of their contractual obligations. In addition, contractual clauses should also be established in order to avoid conflicts. An overview of the termination process, the conditions and a dispute resolution system in case one of them develops is also important. Consideration is what each contracting party renounces or promises to form the contract. It can be something of value, such as money, goods, services or goods.
For example, imagine an employment contract between an employer (promising) and an employee (promised). The employer offers employment to the employee and the employee accepts the offer. In this case, the employer`s counterpart is the work (and the employee`s compensation), and the employee`s counterpart is the employee`s promise to work for the employer. Contracts are mainly governed by state law and general (judicial) law and private law (i.e. private agreement). Private law essentially includes the terms of the agreement between the parties exchanging promises. This private law may prevail over many of the rules otherwise established by state law. Statutory laws, such as fraud law, may require certain types of contracts to be recorded in writing and executed with certain formalities for the contract to be enforceable.
Alternatively, the parties may enter into a binding agreement without signing a formal written document. For example, the Virginia Supreme Court ruled in Lucy v. Zehmer that even an agreement reached on a piece of napkin can be considered a valid contract if the parties were both healthy and showed mutual consent and consideration. A tender is a clear indication of the terms of an agreement to which the tenderer is bound. It must be clear and create a legally binding contract. For example, an offer to sell a car for $500 is an offer that, if accepted, creates a binding contract. The fourth required element of a valid contract is legality. The basic rule is that the courts will not enforce illegal transactions.
Contracts are only enforceable if they are concluded with the intention that they are lawful and the parties intend to legally bind themselves to their agreement. An agreement between family members to go out to dinner with a member who covers the check is legal, but it is unlikely to be made with the intention of being a legally binding agreement. Just like a contract to purchase illegal drugs is entered into by a drug dealer, where all parties know that what they are doing is against the law and therefore not a binding contract in court. This element is the acceptance of the conditions of the offer presented. In real estate, it could be the seller who accepts an offer to purchase a property from a buyer. If the party responding to an offer changes the terms of that offer, it will not accept the offer. Instead, he makes a counteroffer. Use the five elements to determine if the contract is enforceable. Most of the principles of the common law of contracts are described in the Restatement of the Law Second, Contracts published by the American Law Institute. The Uniform Commercial Code, whose original articles have been adopted in almost all states, is a body of law that regulates important categories of contracts.
The main articles dealing with contract law are Article 1 (General Provisions) and Article 2 (Sale). The sections of article 9 (Secured Transactions) govern contracts that transfer payment rights into interest coverage agreements. Contracts related to specific activities or industries may be heavily regulated by state and/or federal laws.