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Brian Olson Mrs Golden Business Law 8 January 2001 Contract Definition Paper A contract is a binding agreement made between two competent parties that can be written verbal or implied The purpose of a contract is to create an agreement that can be supported by the law Wests Encyclopedia As we enter the new millenium and with the increase in the number of businesses including e-commerce we need to know more and more about contract law Knowledge of contract law can also protect consumers and businesses from misunderstandings The six elements of a contract are binding agreement competent parties form required by law legal in purpose consideration and genuine assent Binding Agreement A binding agreement is a contract verbal or written between parties that is bound by law When two competent parties make an agreement it is considered binding A binding agreement must have an offer and an acceptance An example of a binding agreement would be if Kelly told Jamie that she would buy her car for 6000 and they both agreed to it This agreement is legal in purpose supported by consideration is in the form required by law and is made by two competent parties who gave genuine assent Competent Parties To make an agreement a legal contract both parties have to be competent All adults are assumed to be competent Its important for people who are making contracts to be of sound mind This means that the people involved cannot be under the influence of any substances or be mentally ill Convicts and enemy aliens are also considered to lack capacity Capacity means the ability to understand ones actions and the effects of those actions It is legal for minors to enter into contracts but they cannot be bound by law because younger people have limited experience and are more vulnerable than adults Mietus 163 The purpose of competency is so people dont take advantage of those who are not
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