There's a big difference between a simple agreement and a legal contract. For one thing, breaking an agreement might not make you any friends, but it probably won't land you in court. Break a contract, however, and you can just about count seeing the inside of a courtroom in the future.
While many contracts are filled with complicated wording and mind-numbing legal lingo, the heart of a contract is very simple. In order to be valid, or legally enforceable, a contract needs two basic things:
- An agreement has to be made between two parties.
- Consideration, or something of value, has either be exchanged or promised in exchange for something else of value by each party.
For example, imagine that your wealthy aunt tells you that she'll give you a million dollars because you're her favorite relative. You happily accept the offer, but the check never comes. You might be disappointed or angry, but you probably can't force your aunt to hand over the dough. While you had an agreement with your aunt over the money, you didn't have an actual contract.
On the other hand, imagine that your aunt tells you she'll give you a million dollars the day you graduate college but only if you get a degree in education. You accept the offer, change your major from art to education and get your degree.
If your aunt tries to back out of the bargain, you'd have a pretty good case if you asked the court to force her to cough up the money. Because you gave up something of value (the right to major in what you wanted) in exchange for her promise of something of value (the million dollars), the agreement you had became a contract.
Once you understand the basics of what turns a simple agreement into a contract, it's much easier to understand when you can force someone to hold up their end of a bargain. For more information on contracts, talk to an attorney today.
Source: All Business, "What Must a Contract Contain to Be Legally Binding?," accessed July 27, 2017