Essential Elements of Contract Formation: Offer, Acceptance, and Consideration

Essential Elements of Contract Formation: Offer, Acceptance, and Consideration

Offer as a Fundamental Component of Contract Formation
A contract is formed by four basic aspects that establish its respective duties. The elements consist of an offer, acceptance, consideration, and the purpose to establish legal relations. The completion of all necessary parts is intended to establish a legally valid contract (Feitel & Ryck, 2020).

The thesis statement analyzes and explicates the elements of the contract and the process of contract development. In conclusion, it encapsulates the themes discussed throughout the study.

An offer, as a fundamental component, is regarded as a promise extended to an offeree to engage in contractual terms. This must be detailed, comprehensive, and legally binding (Zuppi, 2020). Conversely, an invitation to treat is intended as a solicitation to submit an offer and is not regarded as a legal offer, since it encourages the other party to make an offer. This may be shown by the case of Laidlaw v. Organ, 15 U.S. 178 (1817). Proposals may be rescinded prior to the acceptance by the opposing party.

An acceptance, conversely, is intended to establish a foundation of recognition for the offer. It may be explicitly conveyed or inferred from behavior. Acceptance is seen essential for establishing a contractual obligation. This may be seen in the context of Pando v. Fernandez, 127 Misc.2d 224 (N.Y. Sup. Ct. 1984). It must be unequivocal and without deviation from the specified conditions, necessitating communication from the offeror and requiring acknowledgment.

Consideration denotes that a person have the authority to execute a commitment made by another party in exchange for anything else. The case of Hamer v. Sidway, 124 N.Y. 538, 27 N.E. 256 (N.Y. 1891) serves as an illustrative example. It is intended to satisfy the stipulations outlined in the offer. This may be seen via the example of ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996). Nonetheless, the consideration aspect of the contract is expected to include the fulfillment of a pre-existing duty and is not regarded as historical. This is shown by the case of Angel v. Murray, 322 A.2d 630 (RI 1974). Consequently, the concept must be established and adhered to without judicial scrutiny.

The intention to form legal relations, or a meeting of the minds, requires mutual intent from both parties. This may be shown by the case of Specht v. Netscape, 306 F.3d 17 (2d Cir. 2002). The parties entering into a contract must possess the purpose to be bound by legal relations, since this is a fundamental element of the contract and should not be an ambiguous aspect of it. The binding effect is generated from this element. Lawful ability refers to the condition in which persons engaging into a transaction possess legal age and mental competence (Rana, 2019).

Acceptance as the Foundation of Recognition for the Proposal
According to Ren and Duncan (2019), the authors assert that specific conditions must be met when forming a contract; failure to do so would constitute a breach, rendering the offending party liable for damages to the aggrieved party. This may be clarified by referencing the case of Seixas v. Woods, 2 Cai. R. 48 (N.Y. Sup. Ct. 1804). Contracts in the corporate sector are often seen as greatly overblown, since the parties involved may possess divergent expectations, leading to adverse circumstances. Formal written contracts include both inferred and specified elements that aid participants in effectively creating the agreement. A purposeful lack of clarity would render the contractual commitment null and invalid. Consequently, to guarantee the contractual duty is unequivocal, all terms and conditions must be explicitly articulated, enabling the parties to seek damages in the event of non-performance, which would constitute a breach. Therefore, it is evident that to construct a robust contract, the elements of a legal contract must be clearly articulated, since contract law in the United States is deemed to oversee and control the responsibilities formed via the agreement between private parties. Furthermore, the legislation regulating transactions and the sale of goods is regarded as having stringent standardized obligations nationwide, as it is expected to largely implement the Uniform Commercial Code, resulting in considerable variation in contract interpretation due to its emphasis on codified laws within the common law of contracts (Zikai, 2018).

Final Assessment

In conclusion, the construction and elements of a contract are essential in establishing contractual responsibilities, since they generate reciprocal duties intended to be legally enforceable. The components are founded on reciprocal agreement or permission, accompanied by offer and acceptance, as well as consideration, which together define and illustrate the legal goal.

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.