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Essential Elements of a Contract essay
← Ethics in GroupsPersuasion →

Essential Elements of a Contract. Custom Essential Elements of a Contract Essay Writing Service || Essential Elements of a Contract Essay samples, help

In order for a contract to be said to exist, four aspects that have to be put into consideration include identifiable parties who are capable of contracting, their express consent, and a sufficient cause or consideration, and a lawful object. The aspects are often propounded using four elements of a contract: offer, acceptance, intention of legal consequences, and consideration (Mallor et al, 2010). Every agreement has to contain these four elements in order to be considered a contract. In case one of these ingredients is not there, the agreement is not legally binding.


In any type of contract, there is a need for a definite and clearly stated offer to undertake a certain activity (Chirelstein, 1998). An offer could be a quotation to the main contractor made by a subcontractor or an offer to lease. An offer is not similar to an invitation to treat. In an invitation to treat, persons are invited to make an offer to other persons, or simply an offer to put some offers into consideration. An acceptance of an invitation to treat does not constitute an agreement.

Similarly, an offer does not include requests for proposals, ball park estimates, letters of intent or expressions of interest. An offer lapses upon the expiry of the time for acceptance, the withdrawal of the offer before it has been accepted, or after a reasonable time within the prevailing circumstances. Contracts of great value tend to have a long life of the offer.


In any contract, only what has been offered needs to be accepted. It needs to be accepted exactly in the form in which it was offered, without any conditions. In case new terms are suggested, this results in a counter-offer, which can either be rejected or accepted. Many offers or counteroffers may be made before an agreement is reached. It does not matter who makes the final offer; what matters is the fact that the acceptance of a certain offer brings the negotiations to a conclusion, through terms and conditions that are established in the contract.

The acceptance of an offer may be made in writing or verbally. It can also be inferred by an action that clearly indicates acceptance, what in other words amounts to performance of the contract (Hunter, 2009). The acceptance needs to be in conformity with the method the person who makes the offer in order for it to be effective.

Intention of legal consequences

In any valid contract, it is required that the intention of the parties is to enter into an agreement that is legally binding. In other words, the parties that are entering into the contract must have the intention of creating legal relations. They must also understand their agreement is enforceable by law. The presumption of the intention of creating legal relations is emphasized, such that the contract does not have to state expressly that you fully understand the legal consequences that go with the contract and you intend them to follow. If both parties to the contract make a decision not to make their agreement legally binding, they must state this clearly in the contract, a measure that will prevent the contract from being legally enforceable.


Any contract that is binding must have the support of valuable consideration. This means that one party makes a promise to do something so that the other party may provide a benefit that is of value, that is, the consideration. Here, consideration refers to whatever each party must give out to the other as the price for the promises of the other party. In ordinary cases, consideration takes the form of payment of money, although this is not necessarily the case; the consideration can be anything of value, including the promise to refrain from exercising a certain right or not to do something (Mallor et al, 2010).

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