Legal Documents: The Precise Formation of Written Contracts?

Answer 1

Many people need legal documents for all sorts of purposes. Perhaps someone is purchasing real estate or starting a new business. He or she likely needs to draft various written contracts that can ensure business transactions are stable and can be trusted. When creating and formulating legal documents, it is important for people to understand the basic concepts surrounding the creation of contracts. Even if one hires a lawyer to write up contracts, it is helpful for a person to thoroughly know how a contract should be created to ensure no future legal mishaps.

For example, in creating an options contract, it is important for people to remember that consideration must exist for such a contract to be enforceable. The Restatement 2d C2A787(a) states than an offer is binding as an option contract if it is in writing and signed by the offeror, and also recites a purported consideration for the making of the offer, and proposes an exchange on fair terms within a reasonable time; or is made irrevocable by statute. As can be seen, consideration is an integral part of any contract.

Courts in the United States have held that valid consideration is necessary for the formation of options contracts. In Board of Control of Eastern Michigan University v. Burgess, the court decided that no consideration was received in a contract for the option to purchase defendant's land. In that contract, the plaintiff had never given any form of consideration to defendant for the option contract. When the plaintiff tried to execute the option to purchase the land, the defendant refused. The court held that had the plaintiff even given one dollar for consideration, then the plaintiff could have the option to purchase the land since a contract would have been formed.

Under the Statute of Frauds, there are certain legal documents and contracts that must be written. Contracts that answer to a creditor for the debt of another, contracts made in consideration of marriage, and contracts that involve that sale of land or affect interest in land must also be made in writing. Lastly, contracts that will not be performed in a one year time frame within their making also must be made in writing.

In contracts for the sale of goods, the Statute of Frauds further requires that the writing must specify a quantity and the specific terms of the agreement.

These are some basic concepts to consider when using legal documents and contracts.