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Breach of Contract Litigation: What Do I Need in a Contract?

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Breach of Contract Litigation: What Do I Need in a Contract? - Anderson LeBlanc Upland Attorneys

Breach of Contract Litigation: What Do I Need in a Contract?

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Article Provided By HG.org

If a party sues for breach of contract, the onus is on that party to prove the validity of a contract. This party has the duty to show that all of the necessary elements are present. The following elements must be in all valid contracts

Offer

In order for a contract to be valid, there must be an offer from one party to another. For example, one party may state that he offers to sell one bushel of goods for $100 to the other party. An offer is a promise made in exchange for another promise, such as the promise to perform a service if the other party promises to pay for it. An offer is more than an indication that a party is willing to deal or negotiate. An offer is not a contract and can be withdrawn before acceptance to avoid a contract being created.

Acceptance

Next, the other party must accept the offer. If he or she asks to modify the terms, this is not acceptance but rather a counter-offer in which case the first party would either accept or reject that offer. An acceptance is a communication that he or she is willing to be bound by the terms of the agreement. The acceptance must be in the format specified in the offer. Some acceptances can only be made by performing the act requested. At common law, a contract was only valid if the acceptance exactly mirrored the offer.

Consideration

Another essential element of a contract is that it must be supported by valuable consideration. Consideration is something of value that is given that is usually a benefit to one party or a detriment to another. While consideration may be money, it does not have to be. The exchange of promises is usually enough to provide consideration.

Mutuality of Obligation

The parties must intend to be bound by the agreement so that they create a legal relationship between the two of them.

Capacity

Both parties must have the legal capacity to enter into a contract. Most people have the legal capacity to enter into a contract. Minors may not have the capacity to enter into a contract. Individuals with mental impairments may lack the competency to understand the nature of the agreement and may not have the legal obligation to follow through with the contract if the court finds to this effect.

State law defines minors and at what age this classification is removed. While a minor can technically enter into a contract, the contract is usually voidable at the minor’s discretion. This keeps the contract in force up until the point when the minor attempts to disavow the contract. This allows a minor to get out of many contracts without being held liable for breach of contract. However, minors may be held to the terms of certain contracts depending on state law, such as being held liable for contracts concerning necessities. These items may include lodging, food, clothing, medicine and other such goods or services.

Individuals who do not understand the purpose behind a contract, its obligations or the consequences of an agreement may be found to lack mental capacity to form a binding contract. However, the contract remains in effect until a court makes a finding of this nature or unless there is already a finding that the party lacks capacity. These contracts are voidable at the incapacitated party’s discretion.

Additionally, if a person signs a contract on behalf of a corporation, the individual who signs must have the legal authority to do so in order to bind the corporation.

Writing

Not all contracts must be in writing in order to be valid and enforceable. However, some contracts are required to be in writing in order to be valid or the defendant can raise the statute of frauds defense to prevent the contract from being enforced. Contracts that must be in writing include contracts concerning land, contracts for goods over $500, marriage contracts, contracts to assume the debt of another and contracts that cannot be performed within one year must be in writing. States may require additional types of contracts to be in writing to be enforceable.

Contract Defenses

Even if all of the legal elements of a contract are met, the party who does not want the contract enforced upon him or her may raise other defenses to the contract. Contracts may be void or voidable if they are the result of mistake, fraud, duress or undue influence. The contract may not be enforced by the court if the contract is unconscionable or is against public policy. Individuals embroiled in a case regarding breach of contract litigation may wish to discuss their case with a lawyer who can explain any other applicable defenses and how these defenses can affect the contract.

Read the original article at hg.org

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