What does it take to make a contract enforceable? When do you need to be concerned about being held to a contract? Is there any way to get out of a contract?
The State of Nevada requires four elements when it comes to enforcing a contract. Those four requirements are as follows:
- An Offer
- Offer Acceptance
- Meeting Of The Minds
Let’s break down each of these terms.
An offer is when you or the other party volunteers to do something based on specified terms. For example, a written agreement to do or not do something via email, text, or a formal written document forms an offer. An offer can even be a verbal agreement.
Example Offer: “Hey, I’ll pick up your dog from the boarding facility and delivery him to your home for $50”.
To have a valid agreement or contract, you need acceptance of an offer. In addition, the other party has to agree to the terms of the deal. Approval can be verbal with a “yes” or communicated by actually doing the actions laid out in the agreement.
Sometimes, disputes can arise on whether one party accepts the offer. There has to be a meeting of the minds to avoid this type of dispute.
Meeting Of The Minds
This concept is a little tricky. First, you only have a valid agreement if both parties agree to the same thing. Each person may have a different view of what they agreed to. When each person has a different idea, the courts will try and honor the agreement by looking at the words used. They will examine the ordinary meanings of the words used based on real-world conversation. Real-world definitions will usually trump a private interpretation of one party. As long as there is enough specificity, the courts will generally default to the customary meanings of those words.
The last element in an enforceable contract is a concept called “Consideration.” Consideration means that each party in an agreement has to give something to the other party. It can not be a “gift.” There has to be value going in both directions. Money is often associated with “value,” but it’s not the only type of value. That value can be an agreement to do something or an agreement not to do something.
So, the elements of a valid and enforceable agreement are
- An offer
- A meeting of the minds
- Consideration flowing in both directions
If you would like further assistance with an agreement or contract, we invite you to call us at 775-448-6070. We would be glad to assist. Sierra Crest Business Law Group has many years experience helping businesses with contracts.