The legal environment of business in The United States is such that any business entity can invest full trust and confidence in the legal system to not only enforce the law, but facilitate it as well. It is this confidence in our judicial system that allows for an economy to flourish. In order to achieve the successful execution of business transactions, there must be a functioning set of rules that hold parties accountable for their actions. In other words, there must be consequences for those who violate our laws, and there must be an assurance from our government that these laws will be enforced.
Contracts are a vital part of both domestic, and international business transactions. A contract is a legally binding agreement between two or more parties who agree to perform, or refrain from performing an act, either now or in the future. Without contracts, it is extremely difficult, if not impossible to conduct business. Again, it is the confidence in the enforceability of contracts that provides a viable medium for business in the U.S. .
Contract law provides both stability, and predictability for all parties engaging in a valid contract. In order for a valid contract to legally exist, there are four requirements that must be met. First, an agreement must be reached by one party making an offer, and another party accepting the terms of the offer. Next, any promises made must be supported by consideration, or something of value. Contractual capacity is another crucial requirement of a valid contract. Both parties must be recognized by the law as competent parties. This includes the parties being legal age of majority, or no longer considered a minor in that state. Mental competence is also considered in contractual capacity. A contract can be void if the court finds that either party was mentally incompetent at the time the contract was formed. Intoxication is also a consideration when determining the enforceability of a valid contract.
