Contract EssentialsAssociation of Business Training
June 28, 2012 — 873 views
A legally binding contract is the bread and butter of the business world. Different types of contracts will include a diverse array of provisions depending on the industry. However, there are a few constants upheld to ensure the strength of the agreement.
In fact, an agreement is essential to any contract. Referred to as the consensus ad idem, or meeting of the minds, the contract must outline the fundamental terms. A proposal is made on the behalf of one party and a formal acceptance is written out signifying a recipients’ willingness to comply with the terms. A promise is made in order to obtain goods or services. The cause of the promise is often referred to as the consideration. Without a consideration, an agreement is void, and vice versa.
A contract must be enforceable by the laws governing the land it was made in. An agreement cannot be legally binding if it requires or offers compensation for either individual to conduct illegal activity. The contract may not be altered nor have conditions attached to it without the original document being changed and all parties must be privy to the negotiations.