This paper is a study of the Element of a Contract detailing the essential elements that constitute a legal binding agreement. A contract can be defined as an agreement between two or more persons for example, individuals, organizations or government agencies and or business, to do, or to refrain from doing something in exchange for something of value. The text states “to qualify as a contract, a set of promises must be based on a voluntary agreement, which is made up of an offer and an acceptance of that offer. In addition, there usually must be consideration to support each party’s promise.

The contract must be between parties who have capacity to contract, and the objective and performance of the contract must be legal” (cited in Mallor, J. P. , Barnes, A. J. , Bowers, T. , & Langvardt, A. W. (2010). Business Law: The Ethical, Global and E-Commerce Environment. New York McGraw-Hill/Irwin. pg. 328). An offer is the promise made by one party to another. For example in my profession as a Technical Sales Expert at Verizon, I sell good and services to Global Fortune 500 companies and present sales offers to my customers for these telecommunication services.

These offers can be written or verbal but are always in clear an unambiguous terms. Offers can be unilateral or bilateral but in my contract cycle it is unilateral. Such offers can either be finalized, when all mutual promises are fulfilled. Or they can expire, if not timely accepted, such as in a sales promotion. The offer can be void, if any of the parties do not or cannot deliver on the promise. Also offers can also be rescinded after acceptance, unless a clause of the offer stipulates that revocation is not allowed. Offers are not legally binding.

Like the offer phase of the contract the acceptance must be given in clear terms. At Verizon, for example the offer and acceptance must be done in good faith. To make the contract binding, acceptance must exactly match the offer. For example, the customer accepting the offer must accept all the terms of the offer and nothing more or less. If a reply to an offer introduces a new term or changes such as pricing or terms of agreement, that reply cannot amount to an acceptance. Rather, the reply would be treated as a “counteroffer” which Verizon is free to accept or reject.

A counteroffer is viewed as a rejection of the original offer, which cannot subsequently be accepted. According to Deborah Shefrin in, Contracts: Deal or no Deal “The process of offer and acceptance results in a mutuality of obligations or bargained-for exchanges, which is at the heart of a valid contract” (2006). It is also important that acceptance should be communicated by the agreeing party within an acceptable time frame set by offeror. However if no such time limit was stated, acceptance must be made within a reasonable time from the date the offer was made.

Depending on the nature of the offer, acceptance may be made through various communication mediums, such as telephone, email, fax or even video conference. The text states “a common definition of consideration is legal value, bargained for and given in exchange for an act or a promise. Thus, a promise generally cannot be enforced against the person who made it (the promisor) unless the person to whom the promise was made (the promisee) has given up something of legal value in exchange for the promise.

In effect, the requirement of consideration means that a promisee must pay the price that the promisor asked to gain the right to enforce the promisor’s promise. ” (cited in Mallor, J. P. , Barnes, A. J. , Bowers, T. , & Langvardt, A. W. (2010). Business Law: The Ethical, Global and E-Commerce Environment. New York McGraw-Hill/Irwin. pg. 380). According to Deborah Shefrin in, Contracts: Deal or no Deal “This is the cause, motive, price, or impelling influence that induces each party into a contract. It is some right, interest, profit, or benefit that accrues to one party, or some forbearance, detriment, or loss undertaken by the other party.

In other words, mere must be value exchanged for a promise. A valid contract requires all parties to give consideration” (2006). For example, Verizon agrees to provide Managed Services to a Pharmaceutical Corporation and, in exchange, the company promises to pay a set fee. In conclusion, the essential elements of a contract are to be adhered to in order that a contract can be legal and binding. There has to be some negotiation followed by an offer and then acceptance.

The next phase is voluntary and consideration. Until there is consideration there is no contact but with consideration there is ontinuance of the contract process to capacity and legality and eventual contract. Contracts have facilitated the growth of modernization, technology and globalization. With the advancement in technology, contracts can be executed and implemented from different parts of the world that is able to improve the human experience, from the basic necessities of life and peace or war. Contracts provides us with the assurance that we may look to the court of law to honor these agreements that were executed in good faith are honored.