A contract is an exchange of promises (“something for something”) that is legally enforceable. Contracts can also be called “agreements”. They can usually be written or verbal (including phone calls or emails) between two or more people. The person or organisation entering into a contract is called a "party".
A contract needs four elements to be enforceable:
- Offer: an offer by one party to another. If an offer is rejected then that offer automatically ends;
- Acceptance: the other party must accept the whole offer without conditions. There can be many offers and counter offers before there is an agreement;
- Consideration: this is what each party gives to the other as the agreed price for the other’s promises; and
- Intention: the people or organisations entering into the contract must intend to create legal relations.
You should try to get contracts in writing and always keep copies of written contracts, orders and similar documents. If the other party does not hold its promise, this could be a breach of contract.
