A contract is a legal document between two or more parties. There are several elements that are necessary in order to make a contract enforceable. The specifics of these various elements may differ from state to state, but all seven of the elements must be present in order for the contract to exist. As such, if one of these elements is missing, a contract can be voided and the parties may not be held liable for any of the obligations set forth in the contract. The contract outlined in the assignment contains all seven elements and makes it enforceable.
The seven elements are listed below: 1. Offer – An offer is the beginning of a contract in which one party proposes an arrangement to the other. The terms and conditions are usually listed in the offer. 2. Acceptance – Acceptance of an offer can be written, verbally expressed over the phone, or in person. 3. Consideration – The consideration is something of value that each of the parties is giving in exchange. For example, money is being given for commercial cleaning services. 4.
Competence or Legal Capacity – All parties involved must have the legal capacity to enter into a contract. All parties must be of legal age, sound mind and body and able to understand the terms of the contract. 5. Mutual Consent – All parties must be able to provide consent. Consent must not be given under duress or undue influence. 6. Legality – A contract is only enforceable if the contract is legal. A contract can’t be for anything that is illegal such as assault, murder, or other illegal acts. 7. Writing – All contracts do not have to be in writing.
However, some contracts related to real estate, marriage, third party debt, and activities that will take longer than a year to complete, must be in writing. The contract in the assignment was between the State of Oregon’s Department of Human Services (DHS) and Professional Data Exchange (Contractor). It provided that the contractor would provide system design and programming services in a certain amount of time as outlined in the scope of work. This would be done in exchange for monetary consideration from DHS.
In regards to possible damages and liabilities there are several. The Contractor could possibly not provide all deliverables in a timely manner as outlined in the contract which would entail more time and money for both parties. Secondly, the implementation of the system could fail or not perform efficiently as expected. Thirdly, DHS data and information could be compromised as it is being exposed to a third party contractor. There was nothing in the contract detailing confidentiality of any and all information.
This opens both DHS and the Contractor up to much damage and liability if pertinent information got into the wrong hands. A breach of contract can have a long lasting effect on both parties. This could possibly mean that one of the parties did not full-fill their obligation of the contract. If that is the case the other party may be forced to sue in court or go to arbitration – both of which can be very costly. Breaching a contract can be very damaging to a relationship between those two parties. Summary.
In today’s litigious society it is imperative for businesses to operate with as much prudence as possible. A contract is a legal document that outlines the duties and responsibilities of each party involved. Having a contract helps to protect companies from frivolous lawsuits that can be costly to defend or pay out if found in fault. Although many companies will forego contracts based on the fact that they are very familiar with the other party, it is not the most efficient way to conduct business.
There is so much to be implied when conducting business and a lawsuit can be very costly – especially to small business. As an accounting major, my goal is to one day have my own firm. I foresee that I will be providing services to clients in which contracts will be a vast part of my day-to-day operations. This project provided a more detailed insight on the types of elements to include or avoid in preparing contracts. References Kennedy, Dan. What Makes a Contract Legally Valid | Entrepreneur. com. Business News & Strategy For Entrepreneurs | Entrepreneur. com.