Business World - What Are the Four Elements of a Valid Contract?

What are the four elements of a valid contract?

• Meeting of the minds between two parties, demonstrating they both understand and agree to the essentials of the deal you are trying to make. This condition or element is often considered a necessary requirement to the formation of a contract.

• An agreement to enter into a contract, when both parties signing a written contract, although oral contracts can be valid too in some situations as long as you have proof such as a witness.

• Consideration, something of value exchanged by each of the parties, such as cash, goods or a promise to do something. An act or forbearance or the promise thereof done or given by one party in return for the act or promise of another.

• The legal competences of each party, meaning the parties are not minors and are of sound mind. Legal capacity or qualification based on the meeting of certain minimum requirements of age, soundness of mind, citizenship, or the like.

Describe the objective theory of contracts. How does that theory apply to this case?

• Objective theory of contract is a doctrine which states that a contract is not an agreement in the sense of a subjective meeting of the minds.

Like the judge noted, since the jets sell for approximately $23 million each, "no objective person could conclude that the com actually offered a Harrier jet."(Judge Wood, Aug. 5, 1999). This was just creative advertisement and anyone that knew anything about how contracts work, knew that this gimmick was just too good to be true.

Are advertisements generally considered offers? Why or why not?

• Generally, advertisements are not considered offers. The advertisement must also determine specific terms that will be binding if accepted by a person. They are simply invitations to consider buying