Contract Law FAQ
Much of our practice – both litigation and transactional – involves contracts. This blog post discusses common issues relating to contract law.
Q. What is a “contract”?
A “contract” is an enforceable agreement. The party seeking to establish a contract generally must show: (1) an offer, (2) an acceptance, (3) a lawful purpose, and (4) consideration.
Q. What is an “offer”?
An “offer” is an expression by the party making it (the “offeror”) of willingness to do a specific act in exchange for something else.
Q. What is an “acceptance”?
“Acceptance” is an expression by the party to whom the offer is made (the “offeree”) of agreement to participate in the offeror’s proposed exchange. This definition sounds simple enough, but can become quite complicated, depending on the type of transaction. Some transactions require the offeree’s complete agreement before an acceptance can occur. Others, like commercial sales of goods, only require agreement as to certain terms. An offeree may accept by oral or written communication, or simply by taking the action requested by the offeror.
An offeree who changes the terms proposed by the offeror does not “accept” the offer; that is a “counter-offer.”
Q. What is a “lawful purpose”?
The term “lawful purpose” is extremely broad, as Illinois encourages parties to transact as they see fit. However, Illinois courts will not enforce contracts with illegal objectives (i.e., an agreement to murder a third person), or which violate public policy (i.e., an agreement to restrain trade).
Q. What is “consideration”?
“Consideration” means the exchange of value between the contracting parties. Each party to the contract must give up something of value, and each must get something of value.
Q. Must a contract be in writing?
Sometimes. Illinois requires a writing for certain types of contracts (i.e., premarital agreements and contracts for the sale of land). However, courts may enforce “handshake agreements” in many different types of transactions. Having said that, a written contract is far easier to prove, and less susceptible to misunderstanding.
If you find yourself in need of a better explanation, please call us today.