Introduction: A contract is the intent to have two parties formally agree on a specific subject. Contracts span a wide range of actions, including: selling goods or property, setting terms of employment, settling a nasty argument, and determining rightful ownership of intellectual property.
Typically, in order to be enforceable, a contract must involve the following elements:
The contract's parties must both fully understand what the contract covers. In a contract involving the sale of a Ford truck, for example, the buyer fully believes he will obtain a vehicle and the seller fully believes he is signing away his righths to the vehicle by selling the truck for a specified amount of money.
An offer (or more than one offer) is made in the contract to another party, who accepts the offer. In a contract to sell a piano, for example, the seller could possibly offer the instrument to the buyer for $500.00. The buyer accepting that offer is a required part of creating a binding contract for successfully selling the piano.
The parties involved in a contract must exchange something of value for it to be valid. In the piano sale example, the buyer receives something of value in the form of the instrument itself, while the seller gets the payment.
To be enforceable, the action that is sought by the contract must be completed. If the buyer of a piano pays a $500 retail price, he can also require that the contract include the delivery of the piano. However, unless the contract provides that delivery will occur before payment, the buyer may not be able to enforce the contract if he does not "perform" by paying the $500.
In the usual "breach of contract" action, the person who is alleging the breach will say that he or she performed all of his/her duties under the contract, while the other party did not live up to its obligations.
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