Elements of a Contract

A contract serves the purpose of being more than an agreement between two or more parties. It is much more than an agreement between two people. Contracts operate most in business transactions as a form of sealing agreements and tying operations between the agreeing parties who are part and parcel of the contract. Contract have to be signed as a form of agreement between the two parties for them to be considered legal and legitimate for considerations (McKenna, 2010). Contracts can be between individual civilians or between the civilians and the government. Contracts are act-binding documents that have a compelling action to the parties have to agree to. A contract has six elements that make it full, legal and legitimate.

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The first element in a contract is the offer element. The element is an expression, which begins the contract that can be written or oral, as long as it meets the legal obligations. However, the offer has to be spelt out in specific terms that are also certain and understandable by the agreeing parties. These include the identity and nature of the item in trade under offer as well as the terms and conditions. The second element is the acceptance element. This element is what creates the contract and as a general rule in contracts, the acceptance offer cannot be withdrawn as well as it cannot vary or modify the terms and conditions governing the contract. The third element is the consideration element. This element has to involve money, interests, rights benefits or detriment, which loss or any responsibility that is given to someone else. This element is necessary in any contract and has to be explicit as well as sufficient for it to support the promise of doing the contract or not doing it (Shabbir, 2010)

The fourth element is the capacity of the parties to get into the contract. There is a general law that governs this element, which is, everyone has a capacity to contract. Therefore, any individual who would want to avoid the contract should plead for lack of capacity in contracting against the party that is enforcing the contract. This is the toughest element to proof in a contract. The fifth element of a contract is the intent aspect of the parties to contract. This is also a basic requirement and it can be written or oral. The element has a determination of the outward words of both the parties above their secret and desired intentions. This element advocates that both parties must have the intentions to enter into the binding contract and one party should not mislead the other (Motowidlo, 2013). The last element is the object of the contract, and to be specific, the object has to be legal. Most states consider gambling as an illegal act in acquiring and enforcing contracts however, other states accept it.

A case scenario is the lottery case where a firm held a gambling exercise based on participation of the parties in a lottery exercise. The firm ended up gaining from the participation of the parties that took part in it and the parties moved quickly to court in order to challenge the decision by the lottery firm. In the country, contracts by lottery, horse and dog racing as well as other forms of gambling were illegal. This brought in light the sixth element of a contract, which is the object of the contract and the court of justice later ruled out in favor of the complainant. On my own opinion, I agree with the decision of the court before the elements of the contracts are clear and universal across states and the constitution of the state did not allow any contracts through gambling procedures.

References

McKenna, E. (2010). Business Practices and Organisational Contract Behaviour: A Student's Handbook. Philadelphia: Psychology Press.

Motowidlo, G. (2013). Handbook of Research in International Law and Business Management. Michigan : Edward & Edgar Publishing.

Shabbir, M. (2010). Exploring Contracts and Business Relations. American Journal of Business Management, 632.