Contract Law: Offer and Acceptance CPA Exam REG

In this video, I explain the element of offer and acceptance in the contract.
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To understand the elements of a legally enforceable contract, it's essential to grasp three core requirements:
Agreement (Mutual Assent) - Offer and Acceptance:
The foundation of a contract is mutual assent, often described as a "meeting of the minds." This means that both parties agree to the same terms at the same time.
Offer: An offer is a proposal from one party (the offeror) to another (the offeree) that is serious enough to be legally binding. It should be clear enough that a reasonable person would understand it as a genuine offer. However, not every statement or advertisement counts as an offer. For example, general advertisements are usually not considered offers, but more like invitations to make offers. A specific advertisement, like "the first five customers can buy this coffee maker for only $1," could be seen as a real offer.
Acceptance: Acceptance is when the offeree agrees to the terms of the offer. It must correspond to the offer terms without any changes.
Consideration:
Consideration is something of legal value exchanged between the parties. It could be money, a service, or even giving up a legal right. The key is that each side must give something of value for the contract to be valid.
Absence of Defenses:
This means there are no legal reasons to invalidate the contract. For example, a contract signed under duress or based on fraudulent information would not be enforceable.
Note on Writing: It's a common misconception that all contracts must be in writing. While certain types of contracts do need to be written (as specified by the Statute of Frauds), many everyday agreements are enforceable even if they're verbal.
Examples:
For the "Agreement" element, imagine two neighbors agreeing on a fence repair. One neighbor offers to pay $200 for the other to fix their shared fence. The other neighbor accepts this offer, creating an agreement.
In terms of "Consideration," consider a freelance designer who agrees to create a logo for a local business. The designer's creation of the logo (service) and the business's payment (money) are both considerations.
For the "Absence of Defenses," think of a scenario where someone is coerced into signing a contract. Since the agreement was made under duress, it would not be enforceable.
In summary, a legally enforceable contract requires a clear agreement with an offer and acceptance, an exchange of something valuable (consideration), and the absence of any legal defenses that would invalidate the contract.
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