Page 44 - S35.Summer 2019
P. 44

Southington Magazine — Summer 2019
Attorney Paul Bedard
The Requirements of a Legal Agreement
Whether it involves an employment agreement, the purchase of a home or automobile, a home improvement project, or a less significant transaction, most people are routinely parties to legal agreements. Some of these agreements are complex and formal, whereas others involve little more than a handshake. However, regardless of the level of significance or formality, it is helpful to understand what constitutes an enforceable contract.
An enforceable contract requires three fundamental elements: offer, acceptance, and consideration. Importantly, there must also be a meeting of the minds between the contracting parties along with an absence of duress, legal incapacity, or any other legal defense to a breach of contract claim. Although a contract can generally be written or verbal, certain types of agreements must be reduced to writing to be binding.
A contract begins with an offer. The offer must
demonstrate a party’s willingness to enter into an agreement under particular terms in exchange for performance by another party. The party extending the offer is the offeror. The party receiving the offer is the offeree. Once an offer is made, the burden shifts to the offeree to accept, reject, or counter the offer.
Once an offer is accepted without modification of
the terms of the offer, a contract is formed. However,
when an offer is rejected, no contract exists until a new offer or counteroffer is made with a resulting acceptance. The rejection of any offer or counteroffer during contract negotiations extinguishes any contractual relationship until a subsequent offer and acceptance transpire. When an offer is made and formally revoked by the offeror before being accepted by the offeree, the offer is no longer legally valid. Acceptance by the offeree after such revocation will not constitute a binding agreement.
Consideration is the legal term for the benefit
bargained for between contracting parties. Consideration is a requirement of an enforceable contract. Consideration can be in the form of money, goods, or services. Consideration can also be in the form of relinquishing a contractual right or agreeing not to perform an action that a party otherwise has a legal right to perform.
As mentioned, contracts can generally be written or verbal. However, a written agreement provides valuable documentation should a contract dispute arise. Moreover, some types of contracts are legally required to be in writing to be enforceable. For example, contracts for the sale of real estate, those contracts that cannot be performed within one year of being made, home improvement contracts, and any agreement for a loan in an amount that exceeds $50,000 are just some of the

   42   43   44   45   46