What is a contract?

contract1

When most people think of contracts, they picture a multi-page document that is written on 8 1/2 x 14 paper and virtually unreadable because it is filled with “legalease”. While many contracts have those qualities, they are by no means required. A contract can be written on a cocktail napkin, created by a series of e-mails, or not have any writing at all. That type is called a oral contract. Businesses and individuals enter into contracts all the time, without knowing it. All contracts, elements include an offer, and acceptance, and consideration. Here is an example of the sequence.

O: If you wash my windows, I will give you $10.
A: I agree to wash your windows for $10.

The consideration must be on both sides. One party is giving $10 and the other party is giving his time and effort in washing the windows. As long as those three elements are present, a contract will exist. In this case, no writing is required. In fact, the window washer probably wouldn’t even need to open his mouth. If he were to walk over to the windows and wash them, his acceptance would be by his action (of washing the windows). The offer would be accepted and completed.

The next few blog entries will deal with the complexities of this relationship we call a contract. Please post any contract questions you may have and I will do my best to answer them!

Brian Fons, Corporate Creations. Brian.Fons@corpcreations.com or check out my Podcast in iTunes.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: