A) How will I be sure I have a valid contract?
Businesses depend on the sanctity of contracts to thrive. It is this guarantee by the state that enables us to continually engage and enter into transactions with one another for economic gain and development. But before contracts can be held sacred, they must first exist and be valid. Without a valid contract, what we have is a mere promise which is binding in honour only and not enforceable in a court of law.
There are 3 main features of a valid contract: Offer, acceptance and consideration. In many business situations it may be difficult to identify these features but it pays to describe them so we can learn to look out for them. While an offer may be described as an unequivocal pledge to do or not to do something an acceptance, on the other hand, is a final expression of assent to an offer given by a person to whom the offer was addressed. A consideration is something offered in exchange for another. It is the price paid for the benefit derived. Two points to note however: first, that both offer and acceptance must be made with an intention to be bound by the offer or acceptance. Secondly, an acceptance must purport to assent to an offer ‘as is’. It must neither vary it nor substitute it with other terms. Offer and acceptance may be made expressly or impliedly by conduct.
B) Must my contracts be in writing?
Apart from cases where it is specifically required, a contract may be oral or in writing or may be even made by conduct.
In specific areas however, the law requires that a contract must be in writing and be signed. The areas in which written contracts are required include
- Contracts for the transfer of a copyright
- Contracts in consideration of marriage
- Contracts which cannot be performed within one year
- Contracts for the transfer of an interest in land
- Contracts by executors of a will to pay a debt of the estate with their own money
- Contract for the sale of goods above a certain value
- Contract of surety ship or guarantee.
This list can be memorised by recalling the Mnemonic “C-MYLEGS” for copyright, marriage, year land, Executor, Goods, surety.
Adejumo Ekisola & Ezeani: Legal Practitioners