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What does it take to make a contract legal?

There's been a lot of talk in the news lately about what it takes to make a contract legal.

The Stormy Daniels affair, for example, revolves around a contract that was only signed by one party. Daniels claims that since the other party never signed, she isn't bound by its terms.

Is that true? Some people think so, while others vehemently disagree.

In order to decide what you think about the contract's validity, you have to know what makes a contract legal in the first place. That includes:

  1. The first party has to offer something to the second party
  2. There has to be acceptance of that offer by the second party
  3. There has to be consideration given on both sides (in other words, you can't get something for nothing)
  4. There has to be an intention to create a legally-binding agreement between both parties

On the face of it, contracts don't seem that hard to understand, so why is there all this potential confusion over the Stormy Daniels contract? Why is there confusion over any contract, really?

First, the language of a contract has to be understandable and plainly spell out what each party is getting from the other. A lot of contracts devolve into language that's almost impossible to understand or include vague terms that can be misinterpreted by different people. That's always a major source of potential conflict.

Second, that last part about both parties having the "intention" of being obligated by the agreement is also a big problem. If there's any sign that one of the parties involved wasn't agreeing to the terms willingly, that could be enough to make the contract void. Did that person even understand what he or she was signing? If not, that's a problem. Did someone involved in the agreement forget to sign? That could also be a problem.

While the somewhat infamous Stormy Daniels contract will probably need to be examined by experts before anyone has the final decision on its validity, you now understand exactly why there's a question.

The best way to avoid contract disputes is to make sure that you review them carefully with the main four factors in mind. Also, keep an eye on the language of any contract -- any vague or misleading terms need to be eliminated before you sign.

Source: smallbusiness.chron.com, "How to Make a Contract Legal," Gary White, accessed April 12, 2018

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