What do you mean by a Contract?
Contract is a legally enforceable agreement. The requirements of a contract are agreement. It means an offer of acceptance with intentions to create legal relations and consideration.
Every contract is bound to have at least two parties, but a contract does not
require that both of them perform specific acts.
Insurance is one of the example.
One party has the right, but not obligation to pay the premium while the other party
who is obligated to pay the coverage damages or option exercise price.
Difference between an agreement and a contract
An agreement is often referred to a situation in which people agree or share the same idea. Thus, it creates obligations enforceable by law. The term contract (or informally known as an agreement in some jurisdictions) is an agreement that has a lawful object entered into voluntarily by two or more parties, each of whom intentionally tries to create one or more legal obligations between them.
Contract, therefore, can be a document on which the words of the contract are written. So all contracts are agreements but all agreements are not contracts. All agreements are not contracts because the term agreement is wider in scope then contracts.
There are six elements that a legitimate contract must contain in order to become valid between two parties. These are as follows:
Proposal or an offer
Acceptance
Consideration
Intention to create legal relations
Capacity to contract
Free consent
What do you mean by an offer?
. An offer is an expression of willingness by the offeror to be bound once there is acceptance of an offeree. In other words, an offer is something that one offers to another person. So the person who is making the offer is called offeror and the one to whom the offer is to be made is called offeree. In order to create a valid contract, there must be a 'lawful offer' by one party and 'lawful acceptance’ of the same standpoint by the other party. An offer can be made to an individual or it can be made to a group. It may be made to the general public. For example a reward for any information, a reward for finding a dog. It may be a return, it may be spoken. It may be implied by a conduct.
Next we are going to discuss the different types of contracts.
Types of Contract
Formal contracts and simple contracts
Nominative contracts and in nominative contracts
Bilateral contracts and unilateral contracts
Executed contracts and executory contracts
We saw that there are many types of contract but today we are going to discuss only the bilateral contract and its guidelines in a more lucid way.
Bilateral Contract
In a Bilateral contract, an offeror is going to make a promise and he/she is going to get a promise from the offeree. Let’s say Harry and David are outside Harry’s house. Harry makes a promise that he will pay $100 to David but in return he wants a promise from David. So David promised to paint his fence in return. So in a bilateral contract two parties make promises to each other. An offer is an expression of willingness by the offeror to be bound once there is acceptance of an offeree. It is an objective standpoint by the offeror to be obliged by its terms once it is accepted by the offeree. An offer can be made to an individual or it can be made to a group. It may be made to the general public. For example a reward for any information, a reward for finding a dog. It may be a return, it may be spoken. It may be implied by a conduct.
What does it mean a contract to be bilateral?
A contract that has a commitment from either party in exchange for something to offer.
A bilateral contract is formed just like any other contract, where it consists of:
An Offer
An Acceptance
A Consideration
A Capacity
A Legality
Bilateral acceptance
The main requirement of bilateral acceptance is meeting of the minds or to be simply mutual. Nearly all Business contracts are bilateral. But when two parties are in bilateral acceptance they should be taken into consideration. Here comes the term consideration.
Consideration
Consideration is an essential component of a bilateral contract Consideration may be executed when one person promises to make a return for the performance of an act. For example, you agree to sell a washing machine to a person called “A” for $1,000. Here, A ‘s promise to pay $1,000 is the consideration for your promise to sell the washing machine and your promise to sell the washing machine is the consideration for A’s promise to pay $1,000. You can get valuable information on Guideline on Bilateral Contract Law Assignment.
Capacity
The capacity of the contracting party becomes another essential element of a valid contract in the sense that the parties to an agreement must be competent to form a contract. If either of the parties does not have the ability to take the chance, then the contract becomes totally invalid. The following persons are said to be incompetent to contract if they are minor. If they have an unsound mind and lastly if they belong to the category of persons disqualified by law to which they are subject. You can get in touch with Contract Law Homework Help for guidance!
Legality
Legality is quality that involves a warranty that an agreement or contract strictly follows the law of a particular jurisdiction. For example, for any insurance contracts, people are having the assumption that all involved risks related to that particular purchased item are covered under the policy, that is they are having some legal ventures. You can get in touch with contract law experts for guidance.
Enforceability of a bilateral contract
Bilateral contracts are said to be enforceable as they are obligated by law.
What is breach of a bilateral contract?
It is just like a duty one performs with respect to another or an obligatory task when bound with a contract or an agreement. If the mutual obligations are not performed in a right way then there comes the breach of a contract.
Now we have handpicked some good examples of a bilateral contracts
Automobile purchase.
Buying a health insurance/ term policy.
Sale of a property.
Purchase of branded cell phones and other electronic items.
Signing to be a member in a particular health club.
Purchase of goods online.
Conclusion
As we have known so far, all bilateral contracts take you to a mutual agreement so in order to get to know about safety all retails and other marketing industries include disclaimer as well as terms and conditions to be followed while advertising their products for sale. So this helps anyone to get a clear idea regarding the bilateral contracts in our everyday life.
Takeaways
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