A contract is a legally binding agreement between two or more parties. It can be oral or written, but it is generally enforceable in a Michigan court. You can use contracts in a variety of situations, such as when you are buying a car, renting an apartment or starting a new job. To protect yourself, it is important to understand the basics of contract law before you sign anything. Three elements must be present for a contract to be valid.
There must be an offer
Contracts always start with an offer from one party to another. The offer must be unambiguous. For example, if you are buying a car, the dealer must make a clear offer to sell you the car at a specific price.
There must be an acceptance of the offer
As the offeree, you must agree to all of the terms of the offer. In our car example, this would mean that you agree to buy the car at the price offered by the dealer.
If you, the offeree, breach any part of the agreement, the contract will become void.
There must be a consideration
You must exchange something of value in a contract. In our car example, you would pay the dealer money for the car. The other side must also give you something of value; otherwise, there is no consideration and no contract.
Besides this, all the parties must have the intention to create a legally binding agreement, and a contract review, negotiation and drafting professional can help you review or draft such an agreement.
Now that you understand the basics of contract law, you are ready to start signing those agreements. Just remember to always read the fine print and ask questions if you do not understand something.