Before signing any contract, you have to be sure that you have completely read and understood each word that is written. A lot of people get into trouble because they do not read everything that is written in the contract. If you do not understand some of the terms that are in the contract, it is best to consult a lawyer and ask him to explain the contents of the contract in detail. This way, you won’t have to worry about breach of contract. There are some elements required before a contract can be called legal.
Here are some tips on understanding legal contracts and terms:
- Four elements. There are four things that must be present in order for a contract to be legal. The first is that there must be a mutual agreement from both parties. The second is consideration. Consideration is a value that is exchanged to fulfill the contract. The third is both parties must have capacity. This means that both of the parties must be of sound mind. The fourth is that the contract must be lawful and must not contain activities that will go against laws. If all of these are met, then the contract is considered legal. These four elements must be present in different contracts, such as employment contracts, business contracts, leases and other forms.
- Bilateral and unilateral contracts. A bilateral contract is an agreement where both parties perform to fulfill the terms of the contract. This contract is an exchange of one action for another. A unilateral contract is a contract where one party gives the offer to the other party when the terms in the contract have been performed. This means that the agreement is made to pay for the performance of the other party.
- Void and voidable contracts. A void contract is not valid. It is not considered a contract. A contract is considered void if the terms are illegal or if one or both of the parties do not have the capacity to engage in a contract. Voidable contracts are different from void contracts because voidable contracts have the four elements that make a contract valid. The contract can be voided at the request of one or both the parties.
- Express and implied contracts. An express contract is where the terms of the contract are expressed either in writing or orally. Express contracts are very helpful in a court of law. Implied contracts are the ones where some of the terms and conditions are not understood even when they are not expressed orally.
These are some of the basic terms you have to know in understanding legal contracts. It is essential to know some of the basic things that constitute a contract so that you can understand if it is a binding contract or not. Knowing different facts about contracts will also help you in writing your own contracts and agreements with other people.