Certain agreements must be in writing to ensure enforceability. These include, but are not limited to: Whether the consideration is appropriate usually has no influence on the enforceability of your contract. For example, it would be possible (albeit ridiculous) under a legally enforceable contract to exchange a peppercorn for something worth $1,000,000. Although these two objects have relatively unequal value, it is only important that the contract be supported by sufficient consideration. Therefore, you just need to make sure that some form of exchange has taken place, in addition, both parties must intend to enter into a legally binding relationship. The law does not assume that both parties intend to transfer mutual rights and obligations to each other only by signing an agreement. However, the written provisions of the agreement may indicate the existence of the intentions of both parties to enter into a legal relationship. Similarly, the subsequent conduct of the parties and the nature of the commercial transaction may demonstrate their intent. (1) Under the benefit-harm theory, an appropriate consideration is present only if a promise is made for the benefit of the recipient or to the detriment of the promisor, which reasonably and fairly leads the promisor to make a promise to the promisor for something else. For example, promises that are pure gifts are not considered enforceable because the personal satisfaction that the guarantor of the promise may receive through the act of generosity is generally not considered a sufficient disadvantage to warrant reasonable consideration. 2) According to the negotiation-for-exchange counterparty theory, there is reasonable consideration when a promising person makes a promise in exchange for something else.
Here, the essential condition is that the promisor has received something specific to induce the promise made. In other words, the market theory for exchange differs from the harm-benefit theory in that the market theory for exchange appears to be the parties` motive for the parties` promises and subjective mutual consent, whereas in the harm-benefit theory, the focus seems to be on an objective disadvantage or legal advantage for the parties. The contract should be signed by all parties and witnesses should be used to validate the contract if future legal problems arise. You`ve probably heard that people use the legal term “enforceable” in different contexts, but have never fully understood its meaning. If a contract is enforceable, it means that you can keep the party`s promise if they don`t keep it or refuse to keep it. You can do this by taking legal action, such as going to court and suing for breach of contract. In this sense, to say that you have a binding contract means to say that you have the support of the law to keep someone`s promise. To further explain these ideas, this article explores the key elements that make a contract enforceable. Without these elements, you run the risk of not being able to enforce your contract. Contracts and agreements that meet all legal requirements but contain illegal actions or products will result in the nullity of the contract. If the contract contains clauses that violate the law, they will not be enforced. “Binding Merriam-Webster.com Legal Dictionary, Merriam-Webster, www.merriam-webster.com/legal/enforceable.
Retrieved January 4, 2022. Contracts arise when an obligation is concluded on the basis of a commitment by one of the parties. In order to be legally binding as a contract, a promise must be exchanged for reasonable consideration. There are two different theories or definitions of consideration: deadweight consideration theory and benefit-harm theory. A legal purpose in contract law is an essential part of an agreement. The agreement is legally binding as long as it includes legal activities and measures. A legal obligation is to perform the act or refrain from bringing an action based on the legality of the obligation. When you draft a contract, the agreement entered into must have a legal purpose. If it is not legal, there is a legal obligation not to comply with the contract. In other words, execution is an action that can be made effective. For example, an agreement or contract between individuals in which one of the parties can legally enforce the performance of the other is called an enforceable contract.