Modern Counsel for Growing Companies
In plain English
The process by which parties create an enforceable agreement. It generally involves an offer, acceptance, sufficiently definite terms, intent to be bound, and consideration, subject to applicable law. Some transactions also require a sufficient signed writing; a formal-looking document alone does not establish every requirement.
Types and key distinctions
Consideration
Something of legal value exchanged for a contractual promise, such as payment, services, property, or a return promise. It helps distinguish an enforceable bargain from a gratuitous promise. Whether consideration is sufficient depends on the agreement and law, rather than whether the exchange later appears financially favorable.
Offer and Acceptance
The proposal of sufficiently definite contract terms and the other party's agreement to them in a manner recognized by law. These are central parts of contract formation, but consideration, intent, capacity, and required formalities can also matter. Negotiations or an acknowledgment of receipt do not necessarily establish acceptance.