All rights reserved. This document provides some fundamental legal isuues involved in contracting. Contract Formation . The two essential requirements to form a contract are mutual assent and consideration . It is what a party objectively demonstrates, not what a party may subjectively be thinking.
Mutual assent is manifested in an offer , acceptance , and consideration .
A valid offer creates a power exclusively in the hands of the offeree such that all that is needed to form a contract is acceptance . If one or more of the terms are missing from the offer , a court may supply those terms. Acceptance is an unequivocal indication that the offeree agrees . Consideration is legal detriment bargained for in exchange , i.e. agreeing to do something which you have no legal obligation to do or agreeing not to do something which you have a legal right to do. Note that it is not necessary to have a written contract in order to have a contract.