ANSWERS: 1
  • A contract is a legally binding agreement between two or more parties. A contract can be oral or written in nature. Three elements of a contract must be present in order to be binding.

    Significance

    A contract can be offered into evidence and is enforceable in a court of law. If the court finds all elements of the contract are met and a party failed to perform on the contract, damages can be awarded.

    Offer

    An offer is the initial requirement to create a contract. It is an invitation to bargain. A written quote or an oral invitation to negotiate are popular forms of offers.

    Acceptance

    A person receiving an offer must accept the offer to create a contract. An acceptance can be an oral agreement, a body gesture such as a handshake, or a written response.

    Consideration

    Consideration, or an exchange of value between the parties must be present. This exchange can be a promise for money, services, or anything else of value no matter how small.

    Breach

    When a party fails to uphold their promise under a contract, they are in breach of the contract. The other part or parties may bring legal action to enforce the agreement under the contact.

    Damages

    Damages can be awarded by the court if a party is found in breach of the contract. Damages can range from ordering a party to perform on the contract to financial awards.

    Source:

    Merriam-Webster.com: Contract

    Resource:

    Law.Com

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