A contract

A contract

A contract is an agreement that is legally binding and analyzes the duties and rights of each party within a given agreement. On many occasions, such agreements refer to the delivery of goods and services or promises that involve monetary items.

Certain elements must be present in a contract for it to be considered to be valid. They include offer and acceptance, a consideration that is monetary in nature, mutuality, the legality of the contract, and capacity of the parties that are involved in the contract. If any of these elements are not present in a contract, it becomes void and not legally binding.

The statute of frauds in the law of contract that suggests that some contracts must always be in writing is required. The requirement also states that the contract must be signed by all the parties in the contract with the aim of providing as much evidence as possible about the existence of the contract.

A unilateral contract is one where an individual makes a promise to another to deliver something when the other party delivers a given level of performance. On the other hand, bilateral contact is one where both parties enter into an agreement and are bound to fulfil their part of the contract.

An option contract is a buyer and a seller. In the agreement, the buyer promises to buy a given amount of goods or services at a given date for a price that is determined when the contract is being made. These contracts are used in the transfer of goods but are also common in the stock market.

A mentally insane person cannot enter into any contract since they do not possess the capacity. Such capacity is one of the main elements of a valid contract.