No contract in New York is valid unless certain elements are acknowledged and made. Ignoring one element could make the agreement voided. There are several, basic parts that make up a business contract.
Offer
A standard contract starts with the offer of a product or service to its recipient. A general offer is provided to a group of people, and a specific offer is provided to an individual.
Acceptance
The person who receives an offer has to accept it in writing. A contract includes a written acceptance of its terms, which the recipient has to sign and date.
Awareness
Awareness is the basic element of knowing what your contract means and understanding its terms. Anyone who signs a contract without being aware of its responsibilities can have the document voided.
Consideration
Consideration is the element of agreeing to make a promise and fulfill the obligations that both parties must make.
Capacity
Capacity is the general ability to fulfill the terms of a contract. The recipient has to meet basic requirements first.
Legality
Legality is the enforceable nature of a contract under business and commercial law. A contract is not legally valid if it’s not signed, explained incorrectly or was signed under fraudulent circumstances. Even if a breach of contract occurs, no consequence can occur if the contract is invalid.
Running a legitimate business involves entering into many contracts. Every contract is valid only when it meets the main elements of offer, acceptance, awareness, consideration, capacity and legality. A valid contract meets basic requirements to be sensible, fair and enforceable in a court of law.
