Importance of Contract Formation Term Paper Example | Topics and Well Written Essays - 1250 words

Importance of Contract Formation - Term Paper Example Any offer, forming these elements, is legally binding. The right of the contracting parties is to get the contract fulfilled in their favor, and to perform only those acts as obligations, which are mentioned in a contract, and not more or less than that. That is how, the formation of a contract, with its essential elements, becomes very significant. Simply defined in law, ‘a contract is an agreement or a promise, enforceable by law, which has the power and capacity to be legally binding’. It is between two or more parties. It could be oral, in writing, through electronic means, or a combination of one or more of these means of a contract. Contract law is based on the principle that is expressed in the Latin phrase, ‘pacta stunt servanda’, which means, ‘agreements are to be kept’. There could be many kinds of contracts such as a sales contract, a partnership contract, a mortgage contract, a rental contract or a marriage contract. Business contracts are considered to be in writing, essentially, to be legally valid. â€Å"Social contracts have long been characterized as appealing to either actual consent or Ideas for legitimacy. Jean-Jacques Rousseau, however, appeals to both, hence gaining the benefits of two approaches.†. Contracts have been used to shape and regularize personal and family matters also, since long. â€Å"Contract has long been used to shape and facilitate non-commercial, personal or family relations. Casebooks are replete with examples of ‘bait promises’.†   Intention to create a legal relationship, which means that both or all the parties to contract must have an intention to enter into a legal relationship. This intention could be express or through conduct but it is considered better if the intention is mentioned expressly in the contract.