What makes an agreement into a contract?

the 5 elements of a contract

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So with this article I'll go through the basic elements of a contract, without the legal terms and hopefully some help when considering making your own agreements.

Offer

What is the focus of the agreement and what is being offered. If its a house being the house is the offer.

Consideration

There has to be a consideration in regards to the offer. most property will legally require a consideration of at least £1.00. You cant literally provide something for free, something is always required in return.

Acceptance

There has to be a shown acceptance of the offer and considerations. This can be in the form of a signature or a handshake or even by giving a nod at an auction.

Intent

There needs to be a clear intent to enter into an agreement for it to be defensible by law. That means it needs to clearly be an agreement that you are making and that you can prove all parties intended to engage with the agreement.

Capacity

Parties with an agreement need to have the mental, legal and physical capacity to make an agreement. This is to prove people who are at risk of being taken advantage. For example you cannot make a legally binding agreement with a 5 year old no matter how hard you try!

About the author

David Barnes

I'm a product manager, engineer and devils advocate on most topics. When I'm not doing my day job, I'm thinking of new products, hiking or listening to surrealist audio books.

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