A contract is a
legally enforceable agreement between two or more parties. It may be oral or
written. A contract is essentially a set of promises. Typically, each party
promises to do something for the other in exchange for a benefit.
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Five essential characteristics of a Legal Contract
·
Legal purpose. A contract
must have a legal purpose to be enforceable.
·
Mutual Agreement. All
parties to the contract must have reached a "meeting of the minds."
That is, one party must have extended an offer to which the other parties have
agreed.
·
Consideration. Each party
to the contract must agree to give up something of value in exchange for a
benefit.
·
Competent Parties. The
parties to a contract must be competent. That is, they must be of sound mind,
of legal age, and unencumbered by drugs or alcohol. If you enter into a
contract with a minor or an insane person, the contract will not be enforced.
·
Genuine Assent. All
parties must engage in the agreement freely. A contract may not be enforced if
mistakes have been made by one or more parties. Likewise, a contract may be
voided if one party has committed fraud or exerted undue influence over
another.
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What happens if a breach of contract happens?
If one party breaches a contract, the other party
may suffer a financial loss. In the previous example, you paid for 50% of the
work but only received half that much. You have several options for obtaining
compensation:
1.
Sue for Damages. You
may sue the contractor for damages. For example, you might sue for the cost of
hiring another contractor to finish the job plus the costs you have incurred
due to the delay.
2.
Specific
Performance. You can compel the contractor to complete the
work required by the contract.
3.
Other Remedies.
If the contractor tricked or forced you into signing the contract, you might
convince a court to terminate the agreement or amend its terms.
Types of Contracts, Agreements & Forms can be created with Form Document Creator
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Free Employment Contract Template
·
Printable Job Application Forms
·
All types of Affidavits
·
Release of Liability
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