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Do I have a Valid Contract?

A valid contract can be hard to define if you’re not a lawyer. While verbal contracts are treated the same as written contracts, it is recommended that the agreement is typed so that both parties are aware of the stipulations.

Elements of a Valid Contract

In order to know whether or not your contract is valid, you will need to know all of the elements that these statements disclose:

Agreement: The official agreement includes the offer and acceptance. This comes after final negotiations are made and do not include offers made in marketing material such as brochures or package deals. The offer made is then accepted by the second party to finalize the agreement.

Capacity: This is in reference to the parties’ age and mental stability. Both parties must be of sound mind and legal age (usually 18 or older) in order for it to be considered a valid contract.

Consideration: In order for the contract to be valid, there must be consideration, or an exchange of monetary value. This is not in favor of one party or the other, but merely an understanding that something of value will be exchanged.

Intention: Intention refers to the acceptance of the agreement by both parties in lieu of a formal contract. For example, paying for a service or product upfront defines the intention that said service or product will be delivered by the other party.


What Constitutes Acceptance?

Acceptance of a contract does not inherently make it valid. A valid contract can only be guaranteed if both parties constitute the following guidelines:

Ensuring Validity: In this case the acceptance, both parties are accepting a contract that is legal, understandable, and all terms of the offer have been agreed upon.

Age of Parties: In the U.S. the age of a consenting adult is 18 years or older. However, children between the ages of 7 and 18 are still eligible to enter a contract with certain limitations.

Mental Capacity: A valid contract will also ensure that the party who accepted the offer is of sound mind and stability. For example, anyone with a mental disease, illness, or someone who is intoxicated at the time of agreement can make the acceptance null and void.

Does It Have to be in Writing?

Valid contracts do not have to be in writing. Verbal contracts are still valid under the eyes of the law. However, the specific agreements, offers, and considerations will be determined by a court if there is no formal written contract.

It is best practice to have agreements and offers in writing so that both parties can validate their awareness of the agreed circumstances. Emails, messages, or other forms of online communication can serve as a written contract, though this is not as secure as having a formal written contract that includes the elements listed above.

List of Common Issues

Even if you believe you have entered into a valid contract, there are still some problems that may arise from your agreement. Here is a list of common issues that accuse from a contract:

  • Verbal contracts
  • Lack of considerations
  • Minor acceptance
  • Vague offer or agreements
  • Delayed acceptance
  • Change of offers
  • No contract expiration date

List of Common Defenses

For anyone who has entered into a seemingly valid contract, there are ways to argue the agreement is void. Some common defenses are:

  • Duress
  • Mistake
  • Illegality
  • Impossibility
  • Breach


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