Contract law states that both parties in the agreement need to provide something of value for the agreement to be valid. Consideration can include money, an item, or completing a certain action for someone.
Mutuality is a contract element that states both parties need to be bound to the agreement for it to be valid. While the roots of those words are the same, they have different meanings when applied to contracts.
A void contract is one that is illegitimate and unenforceable no matter what. Contracts are void because of the way they were drafted. A contract can also be considered void if all obligations have been fulfilled and there is no longer anything to enforce. For example, if Tom and Mike enter a contract stating that Mike will pay Tom to rob a bank and share the profits, this contract is void and unenforceable from the start because the subject matter is illegal.
Although the name may lead you to believe differently, a voidable contract is actually a valid agreement that can be enforced if both parties decide to move forward with it.
However, as the agreement moves forward, the contract can become void later on at the option of one of the parties. The affected party can either decide to exit the contract without committing a breach of contract or continue with it if they wish. For example, if a minor signed a contract with a business, they can choose to exit the contract without penalty if they wish.
Or if they want to move forward with the agreement, they can do that as well. The key difference between a void and voidable contract is the time at which the agreement is considered void. A void contract is unenforceable from the beginning when it was created, and a voidable contract starts as valid but might become enforceable later on. If you have entered a voidable contract and have assumed the position of the party looking to end the agreement, you have to properly terminate the contract.
Or even if you are simply in a contract that you want to end early, you can also implement one of these termination methods to avoid issues later on.
And to do all of that for the contract to be void or terminated is even worse. Here are some tips on reviewing a contract to implement so you can avoid unenforceable contracts, legal trouble, or both. This is arguably the most important part of entering any legal agreement.
Before you send or when you receive an offer, make sure you take the time to read it carefully. Contracts are not a time to play games or try to trick people. Every term, condition, description, and detail of the contract must be as clear and definitive as possible. A lot of contracts will include a section that defines any terms that could have multiple meanings or are too jargony. Make sure the other party is doing this as well. Oral contracts are valid agreements, but they can be a bit difficult to enforce.
Written versions of contracts include all details of the deal and evidence that the agreement actually exists. And the more serious and long-term the agreement, the more important this becomes. Make sure the other party is trustworthy and able to hold up their end of the bargain. Besides those tips, there are a few extra questions you should be asking yourself before sending an offer or signing on the dotted line:.
If you tell the printer to go ahead with the job, you've accepted his offer. But if you tell the printer you're not sure and want to continue shopping around or don't even respond, for that matter , you haven't accepted the offer, and no agreement has been reached. But if you tell the printer the offer sounds great except that you want the printer to use three colors instead of two, no contract has been made. This is because you have not accepted all of the important terms of the offer.
You have actually changed one term of the offer. Depending on your wording, you have probably made a counteroffer, which is discussed below. In day-to-day business, the seemingly simple steps of offer and acceptance can become quite convoluted.
For instance, sometimes an offer isn't quickly and unequivocally accepted; the other party may want to think about it for a while, or try to get a better deal. And before the other party accepts your offer, you might change your mind and want to withdraw or amend it.
Delaying acceptance of an offer and revoking an offer, as well as making a counteroffer, are common situations that may lead to confusion and conflict. To minimize the potential for a dispute, here are some general rules you should understand and follow. Unless an offer includes a stated expiration date, it remains open for a "reasonable" time.
What's reasonable, of course, is open to interpretation and will vary depending on the type of business and the particular fact situation. To leave no room for doubt as to when the other party must make a decision, the best way to make an offer is to include an expiration date.
If you want to accept someone else's offer, the best approach is to do it as soon as possible, while there's no doubt that the offer is still open. Keep in mind that until you accept, the person or company who made the offer -- called the offeror -- may revoke the offer. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site. The attorney listings on this site are paid attorney advertising.
In some states, the information on this website may be considered a lawyer referral service. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state. The consideration component includes the obligations and conditions that state what each party must do. It also mentions the performance, payment terms, liabilities, and what happens if there's a breach of contract.
If there is no effective date listed in the contract, it becomes active when signed. If the person who signed it did not date the signature, the contract becomes active when the agreement leaves his or her hands. However, if the contract includes an effective date, the contract becomes valid from the stated date, and not when the signatures are dated.
For instance, if you sign the document today but the effective date is in a month, you must follow the agreement beginning today, even though you cannot act on it for a month.
Unless the contract includes an expiration date, the offer remains open for a reasonable amount of time. This time frame varies depending on the business and services offered. The best way to avoid confusion is to include an expiration date.
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