Contract Law Coursework Example | Topics and Well Written Essays - 1250 words

Contract Law - Coursework Example The two situations involve contracts that are governed by observance of There are therefore various legal principles that will govern the two situations to have involved formation of binding contracts. A contract is defined as an agreement made between two or more parties that is legally binding. Parties to a contract usually expect a win-win situation where they can both benefit from the contract. However the there is usually no certainty for both parties to attain this situation.2 One party may end up having a legal liability towards the other party. Any contract made whether in an attorney’s office or just written by the involved parties is valid and binding provided that the legal principles involved are understandable to both parties. The contract becomes valid on the acceptance of an offer, provided it is in compliance with the laws of the state. The first principle is the legal capacity which for many states the parties are expected to have attained the majority age of 18 years. The parties are as well expected to be in their sound mental capacity to understand the terms of the contract and consequences for non performance.3 The party representing a business organization is in a position to sign the contract thus binding the business to the contract.4 The second principle is the offer and acceptance. A contract comes to existence upon acceptance of the offer. A person may reject an offer and opt for a counter offer if they fail to agree to the terms allowed. Once accepted, offer can be revoked at any time. A contract is therefore formed on acceptance of offer or counteroffer by both parties. The third principle in formation of a legal contract is the exchange of value or consideration. This is the payment made for the performance of the contract. Consideration may be anything valuable for instance cash or goods and services. Where the consideration made is not stated