Business Law: Contract Validity

The following article will address the basics of what makes a contract valid. In addition, this paper will include an example of a contract as well as which sections make it a valid contract. Then, a contract made between my husband and me, to demonstrate a simple contract. This paper will also go into the factors that make a verbal contract lawful.


Many factors make up a valid contract, or a promise in which the law will enforce. First there needs to be an agreement between the two or more parties involved, a bargain or exchange of service, money or exedra. One main factor is that the contract must be for a lawful purpose, as well as any party involved must be an adult of sound mind. In addition, both parties must be willing to participate in the agreement, and not bullied, harassed or tricked.

If the contract is fulfilled by party members then the contract is discharged, but if for any reason a contract is breached certain remedy must be taken under consideration in order to resolve the broken agreement. (Beatty & Samuelson, 2007, p. 128) Below is an example of a contract, the factors mentioned above will be highlighted in different colors for easy display.

The “yellow” box captures the parties entering into the contract, in the “red” box list the purpose of the contract. The next box or “green” box states the conditions in which needs to be met in order for the contract to be fulfilled. The following box or “blue” box states that each party is in the right state of mind in order to participate in said agreement or contract. In the “purple” box, the agreement explains which court has jurisdiction and can enforce said contract. The final box, which is “orange” includes signature lines for the parties involved, which verifies that all party members involved understand the conditions of the agreement and promise that the contract will be fulfilled.

(Sample Contract, 2008)An example of a simple contract between my husband and I is listed below.

TRADE FOR SERVICES AGREEMENTThis contract or Trade for Services Agreement is effective Monday, August 31, 2009

BETWEEN:Tiffany A. Aliano (the “wife”) located at:612 West Ave, Red Wing, MN 55066

AND:Joseph W. Burks (the “husband”) located at:612 West Ave, Red Wing, MN 55066

WHEREAS Joseph W. Burks (the “husband”) has agreed to do the laundry and mow the lawn for Tiffany A. Aliano who in return is responsible for the dishes and cooking for the residence of 612 West Ave, Red Wing, MN 55066 as of Monday, September 07, 2009. NOW THEREFORE, the parties agree as follows:

Section 1TRADE FOR SERVICES1.1TRADE: Joseph W. Burks is agreeing to complete the following services on a weekly basis while he is residing at 612 West Ave, Red Wing, MN 55066. These services include all members of the residence laundry, as well as mowing the front lawn as well as the back yard. In return, Tiffany A. Aliano promises to do the dishes and cook as needed by members of said residence.

1.2LATE CHARGES: In the case that any participating party under this contract does not perform their duty mentioned in this contract at the prescribed time, then the party must take on other party’s duties as well as their own for two weeks immediately upon infraction, unless party member has a serious reason for not completing said task, such as hospital stay, illness and so forth Section 3WIFE AND HUSBAND WARRANTIES AND REPRESENTATION

3.1DUE AUTHORIZATION: Parties understands and agrees to this contract hereby making this a legal contract, where the terms and conditions must be met by both parties. Both the wife and husband agrees that all mentioned within Section 1.1 will be met and fulfilled. Section 4CONTRACT BREACH

4.1CONTRACT BREACH: In the case, that one or both party’s fails to meet the requirements of the this contract the party in fault is responsible for all mentioned duties as well any fees associated with resolving the contract breach. IN WITNESS WHEREOF, each party mentioned in this agreement has caused it to be executed at 612 WEST AVE, RED WING, MN 55066 on the date indicated above.


Now what about verbal contracts, what makes one valid or recognized by the court? First of all a verbalized offer would have to be made. Let’s say a roofer verbally offered to repair the roof of my home in a week’s time for $1,500. I shake his hand and agree to the terms, he then comes over to my home and has it done within a week, I pay him, therefore completing our agreement. To answer the previous question, yes a verbal contract is legal but only if it includes three major factors, which are offer, acceptance and consideration. Both or all party’s involved must agree with what is being offered, and be in acceptance of the terms and considerations involved with the contract.

Although, verbal contracts are a form of a legal agreement, they are harder to prove especially in the case of no present witnesses whereas in the case the agreement is not met, the ending result turns in to a he said, she said battle, which is often contested. (Verbal Contract Information, 2001) In conclusion, contracts no matter what form they may take as long as they involve an agreement between two or more consenting parties, of sound mind and of age.

Who accept the terms willingly, and without being tricked or forced. As long as the contract is of lawful terms and whether spoken or written, the conditions are stated. Although, verbal contracts are legal, it is better to get everything in writing in case of the situation of a contract breach where a judge would not to waste time sifting through he said and she said banter.

ReferencesBeatty, J., & Samuelson, S. (2007). Introduction to Contracts. In Calhoun, Jack (Ed.), Introduction to Business Law (Second ed., p. 128). Mason, OH: Thomson Higher Education. Sample Contract. (2008). Retrieved September 4, 2009, from American Land Company Web site: Verbal Contract Information. (2001). Retrieved September 4, 2009, from Online Laywer Service Web site: