A contract is formed when certain requirements are met. The law will consider a contract to be valid if the agreement contains all of the following elements:
1. Offer and Acceptance;
- Example offer: Joe offers to sell his car to Sally for $5,000.
- Example acceptance: Sally agrees to buy Joe’s car for $5,000.
- Can be done orally or in writing. Certain contracts must be in writing. See our Blog post “Florida Statute of Frauds: Contracts that Must be in Writing.”
2. An intention between the parties to create binding relations;
- offer + acceptance = “meeting of the minds.” Meeting of the minds means the parties intend to be bound by their agreement.
- Each party must promise or provide something of value to the other party. A bargained for exchange.
- Example: Joe’s consideration is his promise to sell his car to Sally. In exchange, Sally’s consideration is her promise to pay Joe $5,000.
4. Legal capacity of the parties to act; and
- The parties must understand what they are doing.
- Example: Insane individuals lack capacity to enter into legally valid contracts because they cannot understand what you are doing. Minors do not generally have the capacity to enter into a contract (with some exceptions).
5. Legality of the agreement.
- The purpose of the agreement cannot violate the law.
- Example: A contract hiring someone to rob a bank or kill a person is invalid because it violates the law.
An agreement that lacks one or more of the elements listed above is not a valid contract.
Most contracts only need the above listed elements to be legally valid. In certain transactions, contracts must be in writing to be legally enforceable. See our Blog post “Florida Statute of Frauds: Contracts that Must be in Writing.”
A Florida business attorney will ensure that your contracts comply with Florida law. If you have any questions, feel free to contact Abigail D. Edelstein at (407) 862-9449 or make an appointment for a free thirty minute case assessment.