A contract is an agreement which has legal and eligible obligations that is enforceable by law. A contract is generally signed between two parties known as the offerer and the offeree. The offerer is the party who agrees to provide the other party a specific service or product (known as the offer) in exchange of a certain monetary value or in exchange of something legal. Whereas the offeree is the person who signs the contract with the offerer in a condition to get the offer from the offerer.
A contract should have 3 attributes without which it would be nothing but a written piece of signed paper. So, for an agreement to become a contract it has to have:
- An offer, which one party agrees to provide and the other party agrees to receive.
- Acceptance of offer, is the act when both of the parties signs in the agreement paper as a sign of proof that both of the parties have the intention to be a part of the contract. By signing the contract, both of the parties also provides evidence that they have full conscious about the end result and the transaction of the offer which will be made between the parties.
- Validity, refers to the fact that the offer has legal ground to support it and it involves a written agreement between both of the parties.
In order for an agreement to become a contract other additional points needs to be ensured. For example:
- Both parties have to have the capacity and the intention to go through the end of the contract
- Every action and transaction pointed within the contract have to have a legal ground
- All the parties have to agree to involve themselves into the contract with full consent.
It is important to remember that any of the parties can apply to break a contract if the party has accurate evidence to proof that the other party has misinterpreted, hidden, and manipulated the whole or any part of the contract for that party’s self-benefit. In such case either party has the legal right to breach the contract (breaking the contract) and sue the other party for necessary repayment if needed. As a contract has legal terms associated with it, the sufferer (the party who has suffered a loss because of the breach of the contract) has to go through the legal procedure if a breach of contract occurs.