Enforceable Contract
What Is an Enforceable Contract?
An enforceable contract is an agreement that can be implemented in court. Under common law, if a contract is deemed enforceable, the court will compel a party to act or compensate the other for not meeting the terms of the agreement.
What Makes a Contract Enforceable?
The essential elements of an enforceable contract are:
- An offer made by one party to another party
- Acceptance of the offer by the other party
- Awareness of what the contract contains
- Consideration or what each party receives from the other
- The capacity of the parties entering into the agreement
- The intention of the contract
- The legality of the contract
While both written and oral contracts can be deemed valid, written agreements are more easily enforceable in law.
An example of an enforceable contract is when a homeowner agrees to the terms of a bid from a house painter. The painter has provided a written agreement that states the amount they will charge for specific work to be accomplished.
The contract includes the timeframe for the work, the materials the painter will use, and other details such as prep work and clean-up. When both parties sign and date this agreement, it becomes an enforceable contract between the two parties.
What Makes a Contract Unenforceable?
A court can determine a contract to be unenforceable if it does not follow the basic elements of enforceable law. Some issues that would affect enforceable law include:
- Lack of capacity. This factor could apply if one of the parties that signed the contract is a minor or if a signer is mentally ill or was under the influence of alcohol or drugs when they signed the contract.
- Undue influence. For a contract to be enforceable, both parties must agree to the terms willingly. It may be an unenforceable contract if it can be proven that one party was pressured into signing the agreement.
- Misrepresentation. If one party made false statements in an effort to get the other party to sign a contract, the contract might be unenforceable.
A contract also might be considered unenforceable due to no fault or breach of either party. An example might be if a flood or a fire destroyed a painter’s supplies and equipment. Under these circumstances, a court would likely find it impracticable (too difficult or too expensive) for the painter to carry out the terms of the contract.
Since oral contracts can be challenging to prove in court, legal experts recommend that individuals and businesses put their agreements in writing. Most state laws require written contracts for real estate transactions or legal agreements that will last more than one year.
See All Legal Documents and Forms
Helpful Resources:
The Business Professor - Enforceable vs Valid Contracts - Explained
What Is an Enforceable Contract?
An enforceable contract is an agreement that can be implemented in court. Under common law, if a contract is deemed enforceable, the court will compel a party to act or compensate the other for not meeting the terms of the agreement.
What Makes a Contract Enforceable?
The essential elements of an enforceable contract are:
- An offer made by one party to another party
- Acceptance of the offer by the other party
- Awareness of what the contract contains
- Consideration or what each party receives from the other
- The capacity of the parties entering into the agreement
- The intention of the contract
- The legality of the contract
While both written and oral contracts can be deemed valid, written agreements are more easily enforceable in law.
An example of an enforceable contract is when a homeowner agrees to the terms of a bid from a house painter. The painter has provided a written agreement that states the amount they will charge for specific work to be accomplished.
The contract includes the timeframe for the work, the materials the painter will use, and other details such as prep work and clean-up. When both parties sign and date this agreement, it becomes an enforceable contract between the two parties.
What Makes a Contract Unenforceable?
A court can determine a contract to be unenforceable if it does not follow the basic elements of enforceable law. Some issues that would affect enforceable law include:
- Lack of capacity. This factor could apply if one of the parties that signed the contract is a minor or if a signer is mentally ill or was under the influence of alcohol or drugs when they signed the contract.
- Undue influence. For a contract to be enforceable, both parties must agree to the terms willingly. It may be an unenforceable contract if it can be proven that one party was pressured into signing the agreement.
- Misrepresentation. If one party made false statements in an effort to get the other party to sign a contract, the contract might be unenforceable.
A contract also might be considered unenforceable due to no fault or breach of either party. An example might be if a flood or a fire destroyed a painter’s supplies and equipment. Under these circumstances, a court would likely find it impracticable (too difficult or too expensive) for the painter to carry out the terms of the contract.
Since oral contracts can be challenging to prove in court, legal experts recommend that individuals and businesses put their agreements in writing. Most state laws require written contracts for real estate transactions or legal agreements that will last more than one year.
See All Legal Documents and Forms
Helpful Resources:
The Business Professor - Enforceable vs Valid Contracts - Explained