A contract is simply an agreement between two parties detailing
their agreed obligations to each other. A valid contract can be
enforced in court. For a contract to be valid, it must have all the
required elements of an offer, an acceptance, consideration and an
intention to enter into legal relations (in other words, an
intention to be legally bound by the terms of the contract). For
the contract to be valid, all parties to the agreement must have
the legal capacity to enter into a contract. All persons of full
age and of sound mind have the capacity to contract. A registered
company also has the capacity to enter into any contract within the
limits of the “objects” of the company’s memorandum of
association.
An offer will have no legal effect where it is revoked before it
is accepted; where it is not accepted; or where it terminates, for
instance following the death of the offeror for a personal
service. An offer can be revoked at any time until it is
accepted. If you reject an offer and then change your mind later,
it is too late. To get the deal going again, you will need to make
an offer to the other party and hope that they accept. An offer
will lapse either after a fixed period in which it has been left
open and not accepted, or, if no period was fixed for the
acceptance, after a reasonable time has passed. An offer may also
lapse if it is made subject to a condition, which then fails.
If either party dies before the offer is accepted, there is
authority that the person to accept may validly accept provided
that: It is not a personal service to be provided personally to or
by the person who passed away; the person accepting has not been
notified of the death; or If the person to whom the offer was made
dies before acceptance, then it seems the offer will terminate and
cannot be accepted by his personal relatives.
If you want someone to keep an offer open while you think about
it, you may have to pay for the privilege. If you do, and the
person who made the offer agrees to keep it open, your agreement
(which is itself a contract) is called an option. Options are
commonly used when real estate or businesses are sold. Options are
also common in the creative industries, for instance, a production
company can option the rights to adapt a book into a film. They may
not have immediate plans to produce the film but they pay some
money to the owner of the rights to the book, to prevent them from
accepting any other offer from any other production company
interested in obtaining the rights of the book for the same
purpose.
Revising a contract before you sign
In negotiating a contract, it is common for the parties to go
back and forth through several drafts, refining the language. If
you have access to a computer with word-processing software, it is
easy to crank out a fresh version of the contract each time
revisions are made. But that is not the only way to handle changes
in wording. For minor changes, you can simply cross out the old
wording and write in the new, preferred wording with a pen. If you
use this method, each party should initial each change when the
contract is signed, to establish that the changes were properly
consented to and not illegally added later.
Signatures: If a contract has gone through
several revisions, it is a good idea to have both parties initial
each page so that you are sure everyone has a correct copy of the
final draft.
As an extra precaution the agreement may be notarised.
Notarisation means that a notary public certifies in writing that
you are the person you claim to be and that you have acknowledged
under oath your signing of the document. However, very few
contracts need to be notarised or signed by witnesses. The major
exceptions to this rule are documents that are going to be recorded
at a public office charged with keeping such records (usually
called the Registrar of Deeds or Titles). Occasionally, but
very rarely, state laws require witnesses or notaries to sign other
types of documents. Generally, long-term leases and other documents
that affect title or rights in property must be publicly recorded
in public registries e.g., the Lands Registry of the states.
It is a good idea for all parties to the agreement to sign and
date the contract. Solicitors preparing a contract will usually
include a date line (Date: ___________, 20__) next to the place
where each person will sign. Don’t worry if the dates of signing
differ by a few days or even a week, as is common when the parties
exchange documents by mail.
A contract is an original as long as the signatures are
originals. A photocopied document that both parties then sign is an
original. So is a carbon copy or computer-printed copy that both
parties sign. If you enter into a traditional written
contract, which is one document that contains the full agreement of
the parties and is signed by both of them, it is best if each party
has a copy of the contract with the original signatures of both
parties. This is easy if you sign at the same session; simply sign
two originals so that each party can keep a fully signed one.
A contract is simply an agreement between two parties detailing
their agreed obligations to each other. A valid contract can be
enforced in court. For a contract to be valid, it must have all the
required elements of an offer, an acceptance, consideration and an
intention to enter into legal relations (in other words, an
intention to be legally bound by the terms of the contract). For
the contract to be valid, all parties to the agreement must have
the legal capacity to enter into a contract. All persons of full
age and of sound mind have the capacity to contract. A registered
company also has the capacity to enter into any contract within the
limits of the “objects” of the company’s memorandum of
association.
An offer will have no legal effect where it is revoked before it
is accepted; where it is not accepted; or where it terminates, for
instance following the death of the offeror for a personal
service. An offer can be revoked at any time until it is
accepted. If you reject an offer and then change your mind later,
it is too late. To get the deal going again, you will need to make
an offer to the other party and hope that they accept. An offer
will lapse either after a fixed period in which it has been left
open and not accepted, or, if no period was fixed for the
acceptance, after a reasonable time has passed. An offer may also
lapse if it is made subject to a condition, which then fails.
If either party dies before the offer is accepted, there is
authority that the person to accept may validly accept provided
that: It is not a personal service to be provided personally to or
by the person who passed away; the person accepting has not been
notified of the death; or If the person to whom the offer was made
dies before acceptance, then it seems the offer will terminate and
cannot be accepted by his personal relatives.
If you want someone to keep an offer open while you think about
it, you may have to pay for the privilege. If you do, and the
person who made the offer agrees to keep it open, your agreement
(which is itself a contract) is called an option. Options are
commonly used when real estate or businesses are sold. Options are
also common in the creative industries, for instance, a production
company can option the rights to adapt a book into a film. They may
not have immediate plans to produce the film but they pay some
money to the owner of the rights to the book, to prevent them from
accepting any other offer from any other production company
interested in obtaining the rights of the book for the same
purpose.
Revising a contract before you sign
In negotiating a contract, it is common for the parties to go
back and forth through several drafts, refining the language. If
you have access to a computer with word-processing software, it is
easy to crank out a fresh version of the contract each time
revisions are made. But that is not the only way to handle changes
in wording. For minor changes, you can simply cross out the old
wording and write in the new, preferred wording with a pen. If you
use this method, each party should initial each change when the
contract is signed, to establish that the changes were properly
consented to and not illegally added later.
Signatures: If a contract has gone through
several revisions, it is a good idea to have both parties initial
each page so that you are sure everyone has a correct copy of the
final draft.
As an extra precaution the agreement may be notarised.
Notarisation means that a notary public certifies in writing that
you are the person you claim to be and that you have acknowledged
under oath your signing of the document. However, very few
contracts need to be notarised or signed by witnesses. The major
exceptions to this rule are documents that are going to be recorded
at a public office charged with keeping such records (usually
called the Registrar of Deeds or Titles). Occasionally, but
very rarely, state laws require witnesses or notaries to sign other
types of documents. Generally, long-term leases and other documents
that affect title or rights in property must be publicly recorded
in public registries e.g., the Lands Registry of the states.
It is a good idea for all parties to the agreement to sign and
date the contract. Solicitors preparing a contract will usually
include a date line (Date: ___________, 20__) next to the place
where each person will sign. Don’t worry if the dates of signing
differ by a few days or even a week, as is common when the parties
exchange documents by mail.
A contract is an original as long as the signatures are
originals. A photocopied document that both parties then sign is an
original. So is a carbon copy or computer-printed copy that both
parties sign. If you enter into a traditional written
contract, which is one document that contains the full agreement of
the parties and is signed by both of them, it is best if each party
has a copy of the contract with the original signatures of both
parties. This is easy if you sign at the same session; simply sign
two originals so that each party can keep a fully signed one.
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