The Spark Magazine (Jan 2018)

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The Spark | Ignite/Connect/Achieve
Pro Bono
Contract and Six Elements
Hardly does a day go by without individuals entering into one form of agreement or the other, either overtly or covertly.
These agreements can be in form of selling or leasing property, becoming an employee or independent contractor, settling
disputes, and many more. In so many cases, individuals enter these agreements without considering the essential provisions
necessary to create an enforceable contract. Please don’t be one of them.
- By Olayiwola Obayan
In order to avoid or at least minimize pitfalls, I will run
you through some basic elements of a valid contract.
Contracts May be Oral or Written
A contract is basically an agreement between two or more
parties who have the capacity to enter into a contract. It
can be oral, but an oral contract (sometimes referred to
as a verbal contract) may be difficult to enforce unless its
terms can be proved or are admitted by the parties. It
can also be a written contract that contains the essential
provisions that reduce this risk (this is recommended).
Consequent upon the above, below are the essential
provisions of an enforceable contract that must be looked
out for at every stage of a contractual obligation:
Offer
An offer is a mere expression of willingness by one party
to contract on certain terms with another party with the
understanding that the contract will become binding
when accepted by the person to whom it is offered.
It should be noted that an offer may be made in different
ways, such as in a letter, an email, or even your behavior,
so long as it conveys the basis on which the offering party
is willing to contract. An offer should consist of:
1. a statement of present intent by the offering party to
enter into a contract
2. a specific proposal that is certain in its terms
3. a communication that identifies the person to whom
the offer is made. If any of these elements are not
present, an offer has not been made.
Acceptance
Upon an offer being made, acceptance, which is a final
and unqualified expression of consent to the terms of an
offer, should ordinarily follow. Needless to say that an
offer may only be accepted by the person to whom it is
made unless an agent is authorized to accept on behalf of
that person. In addition, an acceptance must be made in
the manner requested or authorized by the offering party.
If the party to whom the offer is made changes the terms
of the offer, he or she has rejected the initial offer and has
made a counteroffer that may or may not be accepted by
the other party.
Competent Parties
Parties to a contract must be competent to enter into a
contract. In general, most individuals are deemed to have
the capacity to contract unless the person is a minor,
incompetent or insane, drunk or drugged when entering
into the contract.
Lawful Subject Matter
In order for a contract to be enforceable, its subject matter
cannot be prohibited by law or violate public policy. For
example, a contract for the sale of illegal drugs is not
enforceable, and a person cannot promise to transfer clear
title to real estate if the property is encumbered by a lien
or mortgage or basically under litigation.
Mutuality of Obligation
In order for there to be an enforceable contract, the parties
must have a common intention or a meeting of minds on
the terms of the contract. The parties must agree to the
same thing, in the same sense, and at the same time. If
one party to a contract has been fraudulently misled about
the terms of the contract by the other party, the contract
is voidable.
Consideration
Consideration is a very important element of an enforceable
contract. Consideration may be money or a promise. In
addition, consideration may consist of a restraint from
suing on a claim that may be part of a legal dispute. There
are however varying views on whether consideration must
be monetary; the main thing is that it must have value in
the eyes of the law. Whatever consideration is provided
under a contract, must be clearly agreed upon by both
parties to the contract or it must be clearly implied by the
terms of the contract.
With this general overview of essential terms, consult a
lawyer to make sure your next contract is legally
enforceable and meets your original intentions.
The information contained in this article is for informational
purposes only and should not be construed as legal advice.
Need legal advice? Send in your questions.
See page 33.
“
If one party
to a contract
has been
fraudulently
misled about
the terms of
the contract
by the other
party, the
contract is
voidable.
“
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