| A contract is simply a binding promise between | | | | said to be an agreement between the parties. It |
| parties which a court will enforce if not carried | | | | is important to note that where an offer is made |
| out. Contracts are essential for modern life. | | | | by the first party and a counter offer is made by |
| Without them commerce could not happen as | | | | the second party then this brings the first offer |
| people could not rely on the promises of another | | | | to an end. |
| if anybody could just pull out of their | | | | 3. There needs to be consideration in the contract. |
| commitments at any time. | | | | Consideration is when both parties offer |
| So how are contracts formed? Well there are | | | | something of value in return for the other |
| several elements to make a valid contract. | | | | promise. That something can be anything of value |
| 1. There needs to be an offer from one party to | | | | to the person providing it (e.g. money, services, |
| another. An example of an offer would be "I will | | | | physical goods etc). |
| paint your house for $500". The offer here | | | | 4. The parties to the contract must intend that |
| obviously being to pain the house for $500. | | | | the promise will be legally binding. Lots of promises |
| 2. The offer must be accepted by the other | | | | are made rashly and. Only those promises which |
| party. This is key for the creation of the contract. | | | | are supposed to be legally binding will benefit from |
| Without a valid acceptance then there can't be | | | | the protection of the courts. |