A contract is a legally enforceable promise that parties make to one another that is common in business relationships. The components of a contract include that an offer has been made, an offer has been accepted and that something of value has been exchanged between the parties.
Though a contract that is not in writing can be enforced, it is difficult to do so and it is best to have the contract in writing. If a contract dispute does arise, having the contract terms in writing is helpful. The basic elements of a contract are an intent to make a contract by both of the parties; the subject matter of the contract must be legal; an offer is made by one of the parties; the other party accepts the offer; there is a meeting of the minds; something of value has been exchanged; and in some circumstances, the contract must be in writing.
Important components of a valid contract are an offer and acceptance. There are different methods of accepting an offer including clearly stating or writing out acceptance; fully performed according to the offer; a promise to perform; or performing improperly based on the offer. A contract may be considered breached when it is valid yet one of the parties has failed to perform according to the contract. In those circumstances, the non-breaching party may have several different legal options and remedies.
Damages for a breach of contract include financial damages, as well specific performance of the contract or rescission of the contract. It is essential for parties to a contract to understand how to form a valid contract and what to do if that relationship results in a contract dispute.