Elements of a contract. Before we talk about the elements of the contract, first we have to understand exactly what a contract is. And actually a contract it's very simple. It's a promise. When you hear the word contract, think of the word "promise," but it's a promise that is legally enforceable under the law. And if there's a breach, then the law will allow a remedy for that breach. So that's what a contract is. It's a legally enforceable promise. Now we're going to be talking about elements of a contract here. And another word introductory word here is that different writers, different textbooks, different legal sources, commentators will will express the elements of a contract in different ways. So this this is one of the sets of elements of contracts I think is all-encompassing, and this is the the list of elements that I teach. First of all first element is going to be capacity. That means that that the person making the promise has to be of necessary proper age, usually 18, to be able to lawfully be held to the promise that they make. There's another aspect to capacity, and that is this mental element, that they must be a sound mind. And of course these these two elements relate to natural persons. When we talk about capacity regarding artificial persons like in which we call entities like corporations, partnerships, limited liability companies, so forth and even executors and trustees and guardians and agents in general, those folks enter into contracts too but we don't worry about or concern ourselves with age or mental capacity therefore capacity for this capacity element, but rather "authority." Do these people that enter into the contract on behalf of the corporation or the partnership, do they have authority? Are they authorized to do that? So that's our first element, capacity. Our second element is offer. In fact let's let's just take a quick look at this board. Offer, acceptance, consideration. These three elements are what are generally viewed as the classical elements of a contract. But of course we're adding in this presentation we're adding consideration of some other elements as well. So let's take these one by one. In addition to capacity on the previous board we've got offer, an offer to make a contract. What's an offer? Well the Restatement on Contracts says that an offer is a manifestation of willingness to enter into a bargain, manifestation of a willingness to enter into a bargain so made as to justify the other person that their assent is invited. And that if they assent to the offer, and we're talking about acceptance here, if they assent to the offer then that concludes the bargain. They got a deal. So that's what an offer is. "I want to do a deal with you." And you manifest that in some way. All right once you have an offer then our next element that we look for is acceptance of that offer. And that acceptance under classical common-law is that that it has to be unconditional willingness to be bound by that offer; unconditional. And in some places we even see the the term "mirror-image," that whatever the acceptance is has to be a mirror image of the offer, exactly. The offeror says "I'll sell you my car for a thousand," acceptance is "I will buy your car for $1,000" and that's mirror image so you have to have that acceptance. The next element is consideration. Consideration. Say once again what's a contract? It's a promise. Someone's making a promise. So before that person is going to be bound by that promise, they have to, there has to be consideration involved. A person gives a promise, but they're receiving something in return for that promise, and that's something they're getting in return for the promise is what we call consideration. And once you have that consideration in exchange for the promise given, you're bound, and you've, that's another element of a contract in place. So you basically have an agreement at that point. Now even though you have that agreement at that point you still may not have an enforceable contract. And that's what we're looking at here. All these are elements of an enforceable contract. Our next one is, you must have a mutual agreement between the people, the parties of the of this promise, or it could be two promises that are being traded. There has to be a meeting of the minds. They have to be on the same page. They have to be, have a perfect understanding of what they're talking about and be in perfect agreement. There's an old English case of one farmer selling what they thought was a sterile cow to another farmer. They made the deal and then turns out that the cow was actually pregnant with a calf. And so the question was, well do we have a contract or not? And the courts ultimately said, no, there was no contract when the meeting of the minds because they weren't talking about the same thing. They weren't talking, they weren't involved, they were talking about a sterile cow when in fact they were promising back and forth and selling exchanging between them a very fertile animal. So you have to have a mutual, meeting of the minds, mutual agreement. Everybody on the same page. Legality. The contract has to be legal in all aspects. First of all in its purpose or subject matter. If I want to make a contract to to buy fireworks but it's not the fireworks season and in my particular jurisdiction, that's an illegal contract for me to take delivery of that. Or say alcohol of some kind without having that liquor license, or if I'm in a in an area that does not allow liquor sales. So it has to be of a proper has to be legal. What, here's a silly one, what about a someone who employs a hitman and the hitman actually turns out to be someone wired by the police picking up all the all the wheeling and dealing and then they make the arrest. Well, why can't the person who wanted the killing done sue the suppose it hit man for breach of contract for the promises they made? Of course that's silly. But it underlines the point the contract has to be a legal a legal contract; has to be legal in the way is procured. You can't procure an otherwise legal contract through bribery because that that in itself is illegal. And the way you carry out the contract has to be carried out in a legal way. Once again you can't use bribery to carry out a otherwise legal contract otherwise that would would void enforce enforcement of the contract. Our last element then is proper form. We're talking about this contract has to be in writing or can it be an oral contract? Well, generally contracts can be oral. They don't have to be in writing unless they're certain types of contracts, and I've listed a few of these here where a writing is required. Real property transactions must be in writing. A contract that's not going to be performed, it can't be performed within one year's time, that contract must be in writing. And another example would be a contract where one person guarantees someone else's debt. They're going to pay someone else's debt for them, be bound by that promise. That has to be in writing. These documents according to this law, that all states have, they're called it's called the statute of frauds. It's an old, variation of an old English statute that says certain types of transactions must be in writing and they must be signed by the person who's making the promise, who's going to be bound by their promise. Okay. So proper form, and that's our last element. So to summarize, here are our elements of a contract: capacity, offer, acceptance, consideration, mutual agreement, legality, and proper form. And those are the elements of a contract.