Thursday, December 5, 2013

Conditions for Valid Contract

"Nonsense. We have a contract. Your first performance is tonight. Be there or I'll sue."
--General Thomas Waverly (White Christmas)

A contract is an agreement between two or more parties that facilitates and governs exchange.

What conditions must be met in order for a contract to be valid? Seems to me there are several, including:

Voluntary. The contractual agreement must be voluntary. If a party is 'forced to sign,' then a contract is not valid.

Representation. Contracts must be negotiated by the parties involved in the exchange. If the parties are not present in person or in principal via individuals expressly serving as negotiating agents, then a contract is not valid.

Clarity. Terms of the contract must articulated in a manner that is not intended to deceive a party involved in the agreement. If it can be reasonably construed that deception was intended, then a contract is not valid.

Ownership. Parties must possess clear title on what will be traded. If parties do not own items to be exchanged, then a contract is not valid.

Measurable. At any time, it must be clear whether parties are meeting the terms of the agreement or not. If compliance cannot be measured, then a contract is not valid.

Remedy. Remedies must be available to a party in the event that counterparties do not meet the terms of the agreement. If alternatives are not available should there be a breach, then the contract is not valid.

1 comment:

dgeorge12358 said...

Mr Newbury: What have you been doing with your life?
Marty: Uh....professional killer.
Mr Newbury: Oh! Good for's a growth industry.
~Grosse Pointe Blank, 1997