Reviewing Important Points

1 A contract is a legally enforceable agreement between two or more parties. It results from a valid offer and acceptance.

2 There can be no contract without mutual agreement.

3 Generally all persons who can understand the nature of a contract and its consequences have the capacity to contract. Such persons are said to be legally competent.

4 Minors, insane persons, seriously intoxicated persons, convicts, and aliens lack full capacity to contract.

5 An offer must be (a) made with the offerer’s apparent intention to be bound by it, (b) definite, and (c) communicated to the offeree.

6 If not accepted, an offer is ended (a) at the time stated, (b) at the end of a reasonable time if no time is sated, (c) by rejection, (d) by counteroffer, (e) by the offerer’s revocation or (f) by death or insanity of either of the parties.

7 Generally the offeree must accept the offer unconditionally and in the exact form and manner indicated by the offerer.

8 An acceptance must be communicated to the offerer. If it is sent by mail or wire, it is effective at the time it is properly sent unless the offerer specifies that it had to be received to be effective.

9 Agreements that are enforceable by the courts are valid contracts. Those that are not enforceable only by either party are void agreements. Contracts enforceable only by the injured or specially protected incompetent party are voidable at such party’s option. Unenforceable contracts are those that are valid but cannot be enforced.

LESSON 5 LEGALITY OF AGREEMENTS