When attempting to find work in contracting and contract management, how do you stand out from your competition? Competition can be very steep, so understanding all aspects of a contract can be very important. Whatever the situation, the person who was the most qualified individual would at all times be the first consideration.
Contract management It can even be important in the case of a business owner. If you do not understand the basics of a contract, you can put yourself in a risky position financially. Whether you’re a small business owner looking to find out how contracts work or a contract employee looking to update your knowledge, here are the six elements of a contract, so you have some basic information on them.
Offer
To initiate a contract, the offer must be renewed. Usually, the offer is extended by the individual or the company, who initiates the initial contact between the two parties. The offer must include the nice points of the agreement, including terms and conditions.
Reception
Once the offer has been extended to an individual or organization, the offeree then has the opportunity to accept, reject or negotiate the extended proposal with its terms and conditions. There are three ways an individual or company can legally accept an offer and that’s by letter, e-mail or verbally.
Mutual agreement
The ‘meeting of minds’ or mutual agreement (additional terms include: original consent, mutual agreement, and consensus ad idem), referring to contract law, is an occasion when both parties have mutually recognized a contract, and both parties have agreed to enter into in the contract and its terms. Now, even if both parties have agreed to the terms, by law, they can be rescinded for numerous reasons including coercion, undue influence, fraud, or misrepresentation.
Consideration
According to the legal definition, consideration is payment or money. It’s the answer why someone enters into a legal contract. It does not must be money; it could be a product, property, protection or service offered in lieu of money. The point is that something of value must be exchanged in order to be considered a sound legal agreement.
Capacity
Capacity is “the ability, ability, or suitability to do something – the legal right, power, or competence to do this action. It is the ability to understand the nature and consequences of one’s actions.” Therefore, when concluding a contract, each party must have the legal capacity to do so in order to be considered legally valid. For example, both parties must be mentally competent, meaning not under the influence of drugs or under duress or that a minor (in the US, someone who is 17 years of age or younger) cannot legally contract.
Legality
Finally, contracts can’t be made for anything that is taken into account illegal, for example illegal services or products. Examples of illegal services are arms dealers planning to sell to minors, drug dealers, or dealers in stolen goods.
Understanding the basics of contracts is simply the start. Take a online contract management certification Courses are the best way to make sure you have the in-depth contract knowledge essential to move forward in contract management.
