A contract is a document that legally binds the parties privy to it and it must be a valid agreement. A contract arises when two or more parties enter into an agreement having the following elements: offer and acceptance, binding relation between parties involved, existence of a promise to pay or compensate, parties have legal capacity to act, genuine consent of parties involved, and the agreement be enforceable (Frey, 2015).. Therefore, an agreement that lack one or more of the above aspects is a void contract that is not enforceable in a court of law (Brown & Sukys, 2012). For example, when A sells a car to B under the agreement that A will service the automobile for the next two years. If A fails to honor, its end of the bargain when vehicle sold to A breaks down, it becomes a breach of contract.
One of the contract I have entered into recently is between my property owner and me as a tenant. The contract provides that I should not destroy any part of the house knowingly, service the agreed sum as rent, and agree to the other terms set by the property owner. In the event of a conflict, say my failure to pay rent, the property owner can have an upper hand because I shall have breached the contract.
- Brown, G., & Sukys, P. (2012). Business Law with UCC Applications Student Edition. McGraw-Hill Higher Education.
- Frey, M. A. (2015). Essentials of contract law. Cengage Learning.