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PARTS OF A LEGAL CONTRACT

What is a Contract?

A contract legally binds two or more parties in an agreement to perform specified acts. In order for
a contract to be enforceable, it must contain three elements:

• Offer and acceptance

• Legal intent

• Consideration

In addition, the parties to the contract must be legally able to enter into negotiations A contract can
be between two or more private individuals or between an individual and a company or a
corporation

The deal: (Offer and acceptance)

A contract must have an offer by one party and an acceptance by another party

Acceptance is provided by signing the document

An offer may be made to a person, a class of people, or to the whole world.

An offer is a definite promise to be bound, provided the terms of the offer are accepted.

Legal Intent: (Intention to create legal relations)

Both parties must enter into the agreement with the intent of binding themselves to the terms of
the contract. Unfortunately, some agreements are verbal, and those are often the hardest to
enforce. For that reason, some states require contracts to be in writing, to ensure that both parties
legally intended to enter into the deal.

Commercially based agreements will be seen as including a rebuttable intention to create a legally
binding agreement. However, the law presumes that domestic or social agreements are not
intended to create legal relations. For example, an arrangement between siblings will not be
presumed to be a legally binding contract. A person who wants to enforce a domestic or social
agreement will need to prove that the parties did intend to create a legally binding agreement.

Consideration:

A contract is not legal if there is no consideration of value. Each party to the contract must receive
something of value. Consideration is usually money but it can be anything of value, a cow, a car or
even the promise to perform work for the other party. Our judicial system enforces contracts and if
no consideration is found for one party, a judge may throw out the agreement.

Parties:

All parties to a contract must be legally able to participate in the deal. In the United States, a child
under the age of 18 is unable to enter into a contract. In addition, a person must be of sound mind
in order to participate in a contract and no coercion may take place. All parties must enter into the
contract of their own free will.
Legality:

All parts of the contract must fall within the boundaries of the law. If a contract involves an illegal
act, it is not enforceable. You may enter into a contract to sell your car for money but you may not
sell it in exchange for illegal drugs. The contract must not commit another person who is not a party
to the contract. For instance, a parent may not sign a contract that forces his son to work for a third
party.

Remedy:

The courts provide legal remedy for breaches of contract. In civil court, one party to a breached
contract may sue the other party for "specific performance," a legal ruling that orders the defendant
live up to his end of the deal.

Answer the following questions:


1. What does a contract do in order to perform specified acts?

_________________________________________________________________________
_________________________________________________________________________
2. In order for a contract to be enforceable, what are the elements that must a contract
contain?

_________________________________________________________________________
_________________________________________________________________________
3. When we talk about an offer made to another person or the word, we`re referring
to:
_________________________________________________________________________
_________________________________________________________________________
4. What is the problem with the verbal contracts?

_________________________________________________________________________
_________________________________________________________________________
5. Are domestic agreements intended to create legal relationships? Explain your
answer
_________________________________________________________________________
_________________________________________________________________________
6. Does consideration have to be always money? Or it can be another thing?

_________________________________________________________________________
_________________________________________________________________________
7. How do parties have to enter into a contract?

_________________________________________________________________________
_________________________________________________________________________
8. Can you sell drugs under a contract? Why?

_________________________________________________________________________
_________________________________________________________________________
CONTRACT FOR THE SALE OF GOODS

Paragraph 1. _______________________, hereinafter referred to as Seller, and


_____________________, hereinafter referred to as Buyer, hereby agree on this ____ day of
_______________, in the year ____________, to the following terms.

A. Identities of the Parties

Paragraph 2. Seller, whose business address is _____________________, in the city of


_______________, state of _________________________, is in the business of
___________________________. Buyer, whose business address is ____________________, in the
city of _________________, state of _________________________, is in the business of
____________________________.

B. Description of the Goods

Paragraph 3. Seller agrees to transfer and deliver to Buyer, on or before


________________________ [date], the below-described goods:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

C. Buyer's Rights and Obligations

Paragraph 4. Buyer agrees to accept the goods and pay for them according to the terms further set
out below.

Paragraph 5. Buyer agrees to pay for the goods:

• In full upon receipt

• In installments, as billed by Seller, and subject to the separate installment sale contract of
__________________[date] between Seller and Buyer.

• Half upon receipt, with the remainder due within 30 days of delivery.

Paragraph 6. Goods are deemed received by Buyer upon delivery to Buyer's address as set forth
above.

Paragraph 7. Buyer has the right to examine the goods upon receipt and has ____ days in which to
notify seller of any claim for damages based on the condition, grade, quality or quality of the
goods. Such notice must specify in detail the particulars of the claim. Failure to provide such notice
within the requisite time period constitutes irrevocable acceptance of the goods.
D. Seller's Obligations

Paragraph 8. Until received by Buyer, all risk of loss to the above-described goods is borne by Seller.

Paragraph 9. Seller warrants that the goods are free from any and all security interests, liens, and
encumbrances.

The seller_______________________________ The buyer ________________________________

Workshop

1. Identify the elements of this contract which were given in class


2. Are there other specific elements for a contract of sale of goods? Which are those?
3. Are there any boiler plates in this contract?