20/07/2022
***MAKE SURE YOUR CONTRACT IS VALID***
For a contract to be valid and enforceable, it must meet the following requirements:
1. Concensus
There must be a "meeting of minds" between the parties on the material aspects of the contract - the parties must agree on, for example, the subject or objective of the contract, the price that is payable and the type of services to be performed.
Never have a contract that provides that the parties agree to agree
2. Capacity
All persons or entities entering into the contract must have capacity (be able) to do so - as such, your 7 year old child cannot sign a contract and neither can certain executives of a company, unless they are able to do so by way of an appropriate board resolution
3. Formalities
This can be tricky. Not every contract has to be in writing (although we highly recommend that it should be!). However, certain contracts, for example, a will, must be in writing and must be executed with certain formalities - like being attested to by witnesses. The old hand shake agreements are not recommended and seldomly end well
4. Legal
The contract must be legal. So when you hear the word "contract" used in court to describe a murder involving a hitman scenario, such a "contract" is most definitely not a contract in the legal sense. It can get more complicated in other instances - always remember, you can never contract out of the law and if you try to, your contract will be unenforceable which can land you in serious trouble and with great losses
5. Possible
It must be possible for all parties to the contract to fulfill their obligations - consider a situation where a seller is not the lawful owner of the property sold under a purchase agreement - in this case, it is impossible for the seller to transfer ownership of the property to the buyer - the contract is void and unenforceable. Always make sure that when you enter into a contract, the party/s are capable of fulfilling their end of the deal
6. Certainty
The contract must be clear and concise and a true reflection of what the parties agree to do
This is contract law in its simplest form.
Consult with a contract law specialist before entering into a contract. Drafting one yourself or copying and pasting clauses from other contracts may save you costs in the short term, but this may cause difficulties and hardships and increase your costs substantially in the long term.
Contract Write is here to support and guide you in both drafting and reviewing any contract you intend on entering into so that you can rest assured that your contract is valid and enforceable and that you do not incur any unnecessary hardship and costs.
