HLT 520 Week 2 Discussion 1

Discuss the four components of a valid contract and apply them to a contract with a vendor to purchase a new CT scanner. What would you include in the contract? How would you be sure it would be valid?

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The four components of a valid contract

Introduction

When you’re writing a contract, it’s important to know what makes up a valid contract. In this article, I’ll go over the four components of a valid contract: offer, acceptance and consideration.

Offer

An offer is a clear and definite expression of intent to enter into a contract. It must be communicated to the offeree, who can accept or reject it at any time before performance takes place. An offer includes all terms that are essential to making a contract valid and binding but excludes any other material term (such as those relating to time or place).

An offer may be unilateral (made by one party only) or bilateral (made by both parties). Unilateral offers are more likely than bilateral ones because they allow for greater flexibility in negotiation; however, if you’re negotiating with someone who has made an earlier unilateral offer that hasn’t been accepted yet then your current proposal could appear less threatening than yours would if both sides were entering into negotiations from equal starting points—so keep this in mind when making proposals!

Acceptance

The offeree must accept the offer. If you offer someone a contract and they don’t respond, that’s not considered acceptance.

The offeree must indicate acceptance of the offer (the word “accept” or “accepted”). This means that they understand what you’re offering them, and it also shows that they have enough knowledge to enter into a contract by themselves.

The offeree must have legal capacity to enter into a contract. This means that you’ll need proof from someone who can legally enter into contracts with others—like a parent or guardian—before being able to sign one yourself!

Consideration

Consideration is an exchange of promises between the parties to a contract.

Consideration can be a promise to do something, or a promise not to do something. The consideration must be real and substantial enough for it to be enforceable in law (i.e., have value). Most contracts require some sort of consideration before one party will agree to enter into an agreement with another party for any time period at all; however, there are exceptions (such as implied warranties) where no consideration is needed from either side beforehand but still need some form of mutual consent afterward so that both parties know they’ve reached an agreement by virtue of having signed off on it together during its execution phase.*

Competent parties

The parties to a contract must be legally competent. Competent means that they are able to understand the terms of their agreement, and it does not matter whether or not they are mentally capable of understanding that understanding.

The parties must also be of sound mind, meaning that their mental faculties are healthy enough for them to enter into a contractual relationship with each other.

Conclusion

The contract is the contract. It must be clear, explicit and unambiguous.

There are four components to a valid contract: offer, acceptance, consideration and competence of parties. A valid contract will contain all four components.

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