Legal Help - Legal Advice - When is a Contract Enforceable?

Generally, contracts are private matters between two or more parties. Parties to a contract have many liberties with the contract that they create. They can usually determine for themselves whether or not to have a written contract or not. There are of course, exceptions. For instance, the Statute of Frauds requires certain contracts to always be in writing i.e. an apartment lease generally has to be in writing. The parties can determine the contents of the contract and what the contract involves. The parties also determine how the offer is made and how the acceptance must be exhibited. For instance, in a bilateral contract, the offeror makes an offer to the offeree that is accepted by a promise to do something. For example, the offeror makes the offer to sell his car to offeree, and offeree promises to pay the required sum; they now have an enforceable contract. In a unilateral contract, on the other hand, the offer must be accepted by actual conduct on the part of the offeree, and a contract does not exist between the parties until he does the conduct. In other words, the offeror may offer to pay the offeree if he paints his fence, and the offeree has to accept the offer by painting the fence and only then does a contract exist.

When an offer has been made and acceptance rendered and consideration exists, there is now a contract between the parties and they are bound by the terms of the contract. Therefore, none of the parties to the contract can decide not to fulfill their duties; otherwise, the party will be in breach of the contract.

Also, for a contract to be enforceable, the terms of the contract must be definite and certain. The courts will generally not get involved in the contracts between private parties, but they will have to if one party is claiming that a contract exists, while the other party says that a contract does not exist. That is why having definite and certain terms in a contract is so important. The terms of the contract must be definite and certain so as not to be ambiguous. If the terms are not clear, then the parties to the contract could have different understandings of their required duties under the contract. For example, in one well known case, both parties to the contract thought that their contract was about the same ship called Peerless, but it soon became clear that there were in fact two ships called Peerless, each of which arrived at a dock at different times. Since the parties were not talking about the same ship, the court found that their contract was unenforceable. There was a mutual mistake by the parties. Mistakes and lack of definiteness to the terms of the contract are connected, and they go to show that there was not a “meeting of the minds” between the parties. If there is not a “meeting of the minds” or agreement between the parties, there is not truly a contract.

For a contract to be enforceable, it must be between parties who legally can enter into a contract. In other words, there are certain people who lack capacity to enter into a contract. The most common example of someone that lacks capacity is a “minor.” In most instances, a minor is not able to enter into a contract. In most states, a minor is someone who is not at least 18-years-old. However, often if an adult chooses to knowingly get into a contract with a minor, the minor has the right to disaffirm the contract (to reject his obligations under the contract), but the adult does not have that right. Further, if a minor enters into a contract as a minor and does not disaffirm that contract as a minor, when he does reach the age of legal capacity, he no longer has the right to disaffirm the contract and in fact he has ratified it, meaning he is now bound by the terms of the contract. Other people who sometimes lack capacity to enter into a contract are people who lack mental capacity and thus cannot understand the nature and consequences of the contract. Also, sometimes when a person is extremely intoxicated, he cannot be a party to a contract, essentially due to the same reasons why someone who lacks mental capacity cannot assent to a contract. A person that is heavily intoxicated cannot understand the nature and consequences of the contract.

Most people have the required capacity to enter into a contract, therefore, if they do so it is enforceable. Corporations also have the capacity to enter into contracts.

When is a Contract Enforceable?

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