Contracts and Agreements

These are the criteria that must be met for a written contract to be legally valid

Written Contracts, Agreements & Legal Documents

There was a time when people did business on a hand-shake. And if they encountered any problems, they’d take the dispute to court, and the court would decide on the matter. These days, most people prefer to enter into a written contract. With some exceptions, verbal agreements are still valid and can be upheld. But having a contract in writing lends certainty to what the parties have agreed. If something goes wrong, a properly written contract can protect both parties.

Contracts can be very lengthy and detailed, especially if the parties want to make sure that every possible issue is covered. But a contract needn’t be complicated and difficult to read. It is possible to draft a legally enforceable contract in plain language.

A contract must meet certain criteria in order for it to be enforceable in a court of law. If the “essentiala” or essential components making up the contract are not present, it cannot be enforced. If there is a conflict, the dispute can be taken to court for a magistrate or judge to rule on it. Alternatively, if the contract allows for it, the dispute can be decided by an arbitrator.

Contract versus Agreement

Most people tend to use the terms “contract” and “agreement” interchangeably. But technically speaking, they’re not the same. In terms of Black’s Law Dictionary:

• an agreement is “a mutual understanding between…parties about their relative rights and responsibilities.”
• a contract is “An agreement between…parties creating obligations that are enforceable.”

If this difference appears somewhat confusing, think of it this way: all contracts are agreements, but not all agreements are contracts.

Essentials of a written contract

Certain essential elements need to be in place for a valid and enforceable contract to be created.

• Offer, acceptance and consent: For a contract to come about, there must be an offer and acceptance. All parties must consent, of their free will, to enter into the contract. If any party has been coerced or forced to sign, then the contract is not valid.
• Competence: All the parties must be of “sound mind” when they enter into and sign the contract. This means that none of the signatories must be a minor (they must all be over 18, or legally emancipated). They must not be under the influence (drugs, alcohol) and must be mentally competent. In the business context, if a signatory is a representative, the signatory must be authorised by the principal or employer to sign the contract.
• Lawful purpose: The contract must be for a purpose that is legal. It cannot be for something illegal, such as selling drugs or buying stolen goods.
• Contracts that must be in writing: There are some types of contracts that are required by law to be in writing. Some types of contracts that must be in writing include: Employment Contracts, Sale of Property Contracts, and Ante-nuptial contracts.

Whether you’re looking for a contract, agreement template, legal document, or standard business template, we have a wide variety of legal agreements and contracts for you to choose from. Our pool of legal precedents and templates is growing by the day! Feel free to browse our comprehensive selection of professionally drafted legal agreements and standard contract templates.

Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.