Many people think complex contracts are reserved for the high-powered business world. While contracts play a big role in corporate and business law, they also exist frequently in the everyday lives of most individuals.
The problem is that contracts are inherently complicated and have legal language that the average person may not understand so easily.
Business law firms like The Simone Law Firm provide proven legal services to help you avoid common mistakes and potential legal issues. Contact us today for a reduced fee strategy session.
Definition of a Contract
In its basic form, a contract is a voluntary legal promise between two parties. The agreement between the two parties can be concerning a variety of things. Maybe one party agrees to provide a product or service to the other party. Perhaps the contract prevents one party from doing something.
Types of Contracts: Common Examples
Contracts are used in a variety of common situations:
| Real estate transactions —–> | Mortgage contracts |
| Hiring a contractor —–> | Contractor agreements |
| Entering into a business agreement —–> | Business contracts |
| Renting an apartment or car —–> | Rental agreements |
| Financing a car —–> | Car sale agreements |
| Starting a new job —–> | Employment contracts |
| Planning for the future —–> | Estate planning documents |
| Getting compensated after a car accident —–> | Personal injury settlement agreements |
Elements of a Contract
When drafting a contract or agreeing to terms in a contract, the most important thing to consider is how the language will be viewed during litigation. While it’s true that most contract agreements do not wind up in court, you never know what may happen in the future when it comes to the contract’s terms and life circumstances that will impact them.
It doesn’t matter if the contract in question is being reviewed in Small Claims Court, Family Court, or United States District Court—it’s subject to New Jersey Law if a breach of contract is to be addressed in court.
That’s why contract law in New Jersey requires that every contract have certain elements for the document to be valid and legally binding.
Offer and Acceptance
One party must make an offer to another party for a contract to be valid. Then, the party is presented with the offer and must accept the offer, which is typically accomplished with a signature.
Consideration
For a contract to be enforced in New Jersey, there must be something of value promised by each party, which is known as “consideration.” For example, in a car sale agreement, Party A promises to pay $1,000 to Party B. Party B promises to provide a vehicle to Party A. Both parties are contributing something of value to the agreement.
Mutual Assent and Intent
This element of a contract is often called a “meeting of the minds.” Contracts need to make known the intentions of both parties involved and detail the understanding between the two parties. If either party misunderstands the contract’s terms in any way, legal issues may arise.
Certainty
The final element of a contract is known as “certainty,” which refers to the requirement that contract terms be clear and precise. Vague terms are an issue in contract law; if they aren’t definite and certain, they may not be legally binding.