Essay: Essential Elements Of Contract Formation And Components Of A Valid Contract.

Offer as an Essential Element of Contract Formation

An agreement that is supposed to be having four essential elements are considered to create contract through its respective obligations. These are in the form of offer, acceptance along with consideration and intention to create legal relations. The fulfillment of all the essential elements is supposed to create an enforceable contract that would be recognized by law (Feitel, & Ryck, 2020).

The thesis statement discusses and elaborates on the components of the contract and the contract formation. In conclusion, it summarizes the points that have been deliberated throughout the paper.

An offer as an essential element is considered to be a promise that is made to an offeree in order to enter into the contractual terms. This must be specific as well as complete and capable of acceptance as it is to be bound by law (Zuppi, 2020). On the other hand, invitation to treat is supposed to be an invitation or an initiation to make an offer and is not considered as a valid offer as it invites the other party to make an offer. It can be illustrated through the case of Laidlaw v. Organ, 15 U.S. 178 (1817). Offers can be terminated before the acceptance of the other party.

An acceptance on the other hand is supposed to create a basis of acknowledgement for the offer. It can be expressly communicated or it can be accepted on the basis of conduct. Acceptance is considered to be a necessity in order to create a contractual obligation. It can be perceived through the instance in relation to the case of Pando v. Fernandez, 127 Misc.2d 224 (N.Y. Sup. Ct. 1984). It is supposed to be unqualified without any variation to the proposed terms as it needs to be communicated through the offeror as such requires an acknowledgement.

Consideration is supposed to imply that an individual has the right to enforce if some other party has promise something else in return. It can be observed through the instance of Hamer v. Sidway, 124 N.Y. 538, 27 N.E. 256 (N.Y. 1891). It is supposed to be the fulfillment of the terms and conditions laid down in the offer. It can be grasped through the instance with respect to the case of ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996). Nevertheless, the consideration part of the contract is supposed to be performance of a pre-existing obligation and it is not deemed to be historic. It can be demonstrated through the case of Angel v. Murray, 322 A.2d 630 (RI 1974). Therefore, the principle needs to be established and fulfilled without being judicially criticized.

Intention to create legal relations or meeting of the mind is considered to be something that both the parties need to intend on. It can be enumerated through the instance with regards to the case of Specht v. Netscape, 306 F.3d 17 (2d Cir. 2002). The parties entering into a contract should have the intention to be bound by legal relations as such is one of the most essential elements of the contract as it is not supposed to be inconclusive part of the contract. Based on this element the binding effect is created. Lawful capacity is considered to be when the individuals entering into a contract are of a legal age and of a sound mind (Rana, 2019).

Acceptance as the Basis of Acknowledgement for the Offer

Therefore, according to the authors, Ren, & Duncan, (2019), it has been stated that, while forming a contract these conditions need to be fulfilled as the non-fulfillment would result in breach of contract where the aggrieved party would be liable for damages from the party that breached the contract. It can be elucidated through the case of Seixas v. Woods 2 Cai. R. 48 (N.Y. Sup. Ct. 1804). However, it can be understood that, contracts in the business environment are considered to be significantly overstated as the parties are supposed to have different expectations which creates negative situations. In formal written contracts there are implied and expressed terms where these terms help or assist the individuals in solidly constructing the contract. Due to this, deliberate lack of clarity would result in the contractual obligation being null and void. Therefore, in order to ensure the contractual obligation is ironclad all the terms and conditions need to be expressly stated so that the parties can claim for damages in case of non-performance as such would result in breach. Hence, it can be understood that forming a strong contract the components of a valid contract need to be explicitly stated as contract law in the United States is considered to govern and regulate the obligations that are established through the agreement between the private parties. In addition to this, the law governing transactions along with the sale of goods are considered to have high standardized obligations nationwide as they are supposed to extensively adopt the Uniform Commercial Code and it creates a significant diversity in the interpretation of the contract as it gives importance to the codified laws through the common law of contracts (Zikai, 2018).

Conclusion

Therefore, in conclusion, it can be stated that, the formation and components of a contract are crucial in developing contractual obligations because it creates reciprocal obligations that are supposed to be enforceable at law. The elements are based on mutual assent or consent along with offer and acceptance as well as consideration as such defines and demonstrates the legal purpose.

References

Angel v. Murray, 322 A.2d 630 (RI 1974).

Essential elements of a contract. (2022). [Image]. Retrieved 17 April 2022.

Feitel, J. M., & Ryck, S. (2020). Inadvertent Contract Formation via Email under New York Law: An Update. Syracuse L. Rev., 70, 293.

Hamer v. Sidway, 124 N.Y. 538, 27 N.E. 256 (N.Y. 1891).

Laidlaw v. Organ, 15 U.S. 178 (1817).  

Pando v. Fernandez, 127 Misc.2d 224 (N.Y. Sup. Ct. 1984).  

ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996).

Rana, A. A. (2019). Formation of International Contracts and Formation of Contract in Pakistan: A Comparison. Available at SSRN 3918467.

Ren, B., & Duncan, I. J. (2019). Reservoir simulation of carbon storage associated with CO2 EOR in residual oil zones, San Andres formation of West Texas, Permian Basin, USA. Energy, 167, 391-401.

Seixas v. Woods 2 Cai. R. 48 (N.Y. Sup. Ct. 1804).

Specht v. Netscape, 306 F.3d 17 (2d Cir. 2002).

Zikai, T. (2018). An Overview of Economical Corruption in USA and Analysis of its Future. Journal of Humanities Insights, 2(01), 43-50.

Zuppi, A. L. (2020). The Future of Contract Law in Latin America: The Principles of Latin American Contract Law.