A contract refers to a deliberate and legally binding agreement that is reached after a sufficient discussion to do, or refrain from doing something. It is usually written between two or more proficient parties and it may be spoken or implied. Before entering into a contract, there are elements that are met, and they include the following: mutual consent, offer and acceptance, mutual consideration, performance and delivery, good faith and no violation of public policy. There are two major parties, the offeror, and the offeree that are involved in a contract and a minor one, the third party beneficiary. The importance of a third party in a contract is to offer to a party who has not approved to a contract, a legal right to implement the contract.
In any valid contract, there are requirements that are met and the first one is agreement. This refers to where an offer is made and is usually effective between at least two parties. Acceptance follows an agreement. The parties involved in a contract have to accept all terms that bind the contract.
After agreement, the parties enter into mutual consideration where they consider doing or refraining from doing any form of a lawful act. After consideration, the parties get into a lawful object that defines the capability of the parties in entering to a contract. This implies that each party has to meet the requirements as per the law of contract. This is the contractual capacity into a contract. Aliens, insane, and intoxicated people do not have the capacity to enter into a business. This takes the same interpretation with legality.
A contract is bilateral since it involves more than one party. Here, there is a mutual exchange of defined promises between entities that involve the performance of an act. In a contract, there can emerge a mistake due to several factors. This may result from misinterpretation, fraud, or undue influence. However, a contract requires a form that has to be set by the two involved parties where they formulate terms and conditions of the contract. The form guides the parties in constructing a legal obligation which may have written elements or oral elements. Despite offering and acceptance, a contract may be discharged. Discharge of contract refers to a situation whereby a contract is brought to an end, and each party is freed from the obligations of the contract. A contract may be discharged due to one of the following: discharge by performance, discharge by agreement, discharge by repudiatory breach or discharge by frustration. After a complete signing of a contract, a contract can be breached. This may occur when one party fails to honour terms specified in the contract. However, there are remedies for a breach of contract. One is damages. Damages connote the amount of money awarded as a compensation for effects caused by a breach of contract. Basing on the requirements, a contract cannot be completed using technology since there are some terms that cannot be met through technology.