There are four main elements that must be in a contract to deem it valid.
The first of which is an offer. The offer is the initial start to any interaction from one or more parties intending to enter into a contract. An offer is defined as, the price at which an individual is willing to sell a security or commodity. This is the opposite of bid, which is the price at which an individual is willing to buy a security. An offer is the same as an Ask. The person to make the offer or have something for sale etc. is called the offeror. The recipient to the offer who will consider or accept the offer from the offeror is called the offeree.
For example if someone wanted to take out a mobile phone contract, the offer of the contract has been provisionally set up in the phone shop. Therefore that is where the offer takes place. The shop has the offer and is then the ‘offeror’ and you are the ‘offeree’ looking for the contract.
The second element to any contract is acceptance. The key part of acceptance is that it must be communicated and all terms negotiated or agreed by both parties before the next step of the contract can be entered into. Communication is vital so that both parties know the terms and conditions of the situation exactly and are happy to abide by these. If these terms are unaccepted then the contract will be altered to more suitable negotiations until both parties are happy with it. If any terms are broken within the contract it is called a breach of contract and the offending party can be taken to court.
When considering the phone contract the terms can often be negotiated and altered to suit the needs of the customer, therefore counter offers can be made which set up other contracts deeming their previous agreements void. Once terms are agreed by both parties there is then a solid binding contract in place which both sides are happy to taken part in. You can then move onto the consideration.
Consideration is defined as something given, promised or done in exchange for something else by each party to the agreement. It can take two forms;Executed consideration which is a promise or agreement fulfilled e.g. a reward case such as a lost pet in exchange for money. The other is an executory consideration which is a promise yet to be fulfilled, so has not taken place yet. This is how most contracts begin or are initiated. There is no past consideration due to the fact that if a contract has been entered into you cannot then change the terms without voiding the contract and making a new one. In this case the consideration is where one party pays for the contract terms they have agreed to hereby honouring the contract they have undertaken for a period of time.
The final element is legal intention. For any contract to be valid it has to be legal and lawful. If any part of the contract is illegal there is no contract taking place. There is also the second part of legal intention which comes under intention to create legal relations whereby you state that if the action/service is not fulfilled the offending party can be sued and possibly taken to court.