In the world, there must be some act or regulation that should set relations between parties (business or persons). Otherwise, there would be a total anarchy, and everyone would do what they wanted. That’s why the contracts were invented centuries ago, as obligatory documents. Find more about their history on this source.
You can write a contract almost about everything, except about things or actions that are impossible or opposed to laws, public order or good customs. Such an arrangement would have no legal significance. In order for a contract to be accepted and signed, it is necessary to meet the requirements in terms of the elements it contains. A particular form is not obligatory unless the regulations order it.
Negotiations and Creating an Offer
Negotiations are preparation for making a final contract. These are all actions before arranging the subject of the future contract. When both parties make an agreement on the essential elements of their deal, they formed a basis for creating a contract.
One of the parties presents the proposal of an arrangement. This proposal must be explained and contain all the items essential for its implementation. It depends on what is the subject of the contract, but the price, deadlines, quantity, etc. are the most common items of every contract.
The other party can accept, reject, or suggest changes in the offer. This action can be repeated until both parties find a mutually acceptable solution. When the offer is finally accepted, both sides are free to signed and conclude the contract.
Method of Acceptance
A valid contract must contain a clause on the acceptance of the offer, or in which way parties will declare the acceptance. The method is most often stated in the contract. The most common form of accepting the offer is a signature or a personal statement, although e-mail or phone acceptance is being used recently.
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Acceptance is sometimes implicitly – for example when a buyer pays for the goods, it is a kind of oral contract. As soon as they pay goods, it means they accepted the offer and all conditions of the agreement. The point is that the other party clearly and concisely receives this statement.
Consideration and Competence
Both sides must be equal in any contract. Their shares are equally considered and they have equal rights before signing the paper. The regulatory body assesses whether the shares have a fair value. It doesn’t necessarily have to be in the money. Often these are some oral agreements and promises.
Competence means that both parties are able, physically and psychologically, to compose, sign, and meet the terms of the contract. It is usually assumed that all participants are adult, that they don’t have mental limitations, and that they have a clear mind at a given moment. If one of these conditions is not met, the contract will not be valid.
Writing and Legality
Specific forms of the contracts must be written, but oral agreements have equal validity if they meet the prescribed requirements. The only situation when a written contract is an obligation is when its execution is not possible within a year. Also, business owners prefer a written form; they usually hire business contract attorney to avoid dealing with legal issues.
As far as legality is concerned, the subjects of the contract can only be acts within the law. Certainly, no one who respects laws will not make a legal agreement on committing acts that endanger life, any kind of rights, environment, or violate public order.
Mutuality of Obligation
As both parties have the same rights, the same applies to their obligations. All participants must fulfill everything they have agreed in the contract. It also implies that there is no element of pressure in the agreement. It is based on free will and legal obligations.
Depending on the seriousness of the contract and the contractors, the process may take time, or be resolved very quickly, if parties can agree. In the case of any legal uncertainties, the recommendation is to hire a legal team that will represent your interests during the negotiation, creating, and signing of the contract.