1 offer. An offer can be oral or written as long as it is not required to be in writing by law. It is the defined expression or an open action that starts the contract. It is simply what is offered to another person in exchange for the return of that person’s promise to act. It cannot be ambiguous or unclear. It must be expressed in specific and certain terms, such as the identity and nature of the object being offered and under what conditions and / or terms it is being offered.
2. Acceptance. As a general proposition of law, the acceptance of the offer made by one party by the other party is what creates the contract. This acceptance, as a general rule, cannot be withdrawn, nor can the terms of the offer be changed, nor can it be altered or modified. Doing so turns the acceptance into a counter offer. Although this proposition may vary from state to state, the general rule is that there are no conditional acceptances by law. In fact, by making a conditional acceptance, the recipient rejects the offer. However, the offeror, at his choice, by act or word that demonstrates acceptance of the counter offer, may be subject to the conditions offered by the offeror.
3. Consideration. The consideration for a contract can be money or it can be another right, interest or benefit, or it can be a damage, loss or responsibility transferred to another person. The consideration is an absolutely necessary element of a contract. As a warning, it should be noted that the consideration must be expressly agreed by both parties to the contract or it must be expressly implied in the terms of the contract. A potential or accidental benefit or harm alone would not be construed as a valid consideration. The consideration must be explicit and sufficient to support the promise to do or not to do, whichever is applicable. However, it does not need to have a particular monetary value. Mutual promises are an appropriate and valid consideration for each party as long as they are binding. This rule also applies to conditional promises. As a further clarification, the general rule of thumb is that a promise to act that you are already legally obligated to make is not a sufficient consideration for a contract. The courts determine the request.
4. Capacity of the Contracting Parties. The general presumption of the law is that all persons have the capacity to contract. A person who is trying to avoid a contract would have to claim his inability to contract the party who is trying to enforce the contract. For example, you would have to show that you are a minor, that you are declared incompetent or that you are drunk or drugged, etc. This is often the most difficult burden of proof to overcome due to the presumption of one’s ability to hire.
5. Intent of the Contracting Parties. It is a basic requirement for the formation of any contract, whether oral or written, that there must be a mutual consent or a “meeting of opinions” of the parties on all the proposed terms and essential elements of the contract. The courts have held that there can be no contract unless all parties involved intended to enter into one. This intention is determined by the external actions or actual words of the parties and not just by their secret intentions or desires. Therefore, mere negotiations to reach a mutual agreement or assent to a contract would not be considered an offer and acceptance, even if the parties agree on some of the terms that are being negotiated. Both parties must have intended to enter into the contract and one cannot have been misled by the other. That is why fraud or certain errors can make a contract voidable.
6. Purpose of the Contract. A contract is not enforceable if its object is considered illegal or contrary to public order. In many jurisdictions, contracts based on lotteries, dog racing, horse racing, or other forms of gambling would be considered illegal contracts. However, in some states, these types of contracts are valid. Federal and some state laws establish contracts to restrict illegal trade, pricing, and monopolies. Therefore, a contract that violates those statutes would be illegal and unenforceable. This is true for drugs and prostitution or any other activity if it is considered criminal.