Legally binding contracts include certain elements designed to protect both parties of a contract. While individual contracts contain specific clauses or verbiage designed to address a specific situation, several elements appear consistently in legally binding contracts. The offer serves as the first required element. The offer itself provides a clear expression of intent to accept an agreement
. based on specifically defined terms. In the offer element, the party proposing the agreement indicates agreement to adhere to the contract upon acceptance of the offer. The acceptance provides the second required element of a legally binding contract. An appropriate acceptance indicates a clear agreement to the terms contained in the contract and exactly matches the original offer terms. Whether written or oral, the acceptance reflects the agreeing partys intent to accept the terms of the offer. Typically a contract includes information regarding the exchange of value resulting from the contract. This can range from cash, goods or services depending on the nature of the contract. For example, a contract between an attorney and a client includes information on the nature of the services to be provided such as legal advice and any legal documentation necessary to satisfy the contractual agreement and the monetary compensation received by the attorney for those defined services. The final aspect to a legally binding contract involves the parties agreeing to the terms. While not part of the documented contract, all parties included in the contract must possess sufficient competency to enter into a legal agreement. Depending on individual circumstances or state of residency, competency definitions vary. For example, in general, a person under the age of 18 cannot enter a legal contract without parental consent although a few exceptions exist. Regardless of the nature of a specific contract, these elements provide a legally binding foundation. When a contract includes clearly defined terms and expectations, both parties achieve legal protection should any disagreements or discrepancies arise later. While some states may require additional information, these basic elements serve as a strong basis for a legally binding contract. http://www.nolo.com/legal-encyclopedia/contracts-101-make-legally-valid-30247.html or http://law.freeadvice.com/general_practice/contract_law/binding_contract.htm
