What are the elements necessary to make a contract Law binding?

Question

purchasing a used car from a private party they agree to "financing" a monthly payment . . .how ever its such a good deal that i would like to get the law envolved so there is no unfairness. . . . i wanna write it my self and have both of our signitures in ageence with the terms thereof. .

Answer 1

In all states, there are 4 major components of a contract that MUST be present in order for a court to consider it a valid, and therefore binding, contract. They are:

   1)  Offer & Acceptance ("Meeting of the Minds") - Here is where both parties actually agree to the terms & conditions of the contract.

   2)  Mutual Consideration - What this means is that both parties are exchanging something of value. Both parties are getting something out of the contract. In your case, you are getting the car & he is getting $.

   3)  Agreement to Bind - This is just that you both are agreeing that this is a binding contract & no one can later change the terms in any way without a new contract being made. This step is satisfied by having each party sign the contract.

   4)  Legal Competence - This means that the contracting parties are considered competent under the law. A contract can NOT be made with a minor or else it is not enforceable in a court (in some jurisdictions the minor may CHOOSE to enforce it, but the adult does NOT have that option). Also, each party must be of sound mind upon entering into the contract (psychologically, sober, etc.).

There are a few other obvious little quirks to validity of contracts such as the contract must not be against public interest. For example, you couldn't draw up a contract for the sale of illegal narcotics & expect it to be valid. Overall, the above 4 components are necessary in all enforceable contracts in ALL 50 states.

***When you do draw up your contract, make it as SPECIFIC as possible so there is no wiggle room or gray areas. If there are gray areas, the judge will ALWAYS interpret the area of question in favor of the person who DID NOT WRITE the contract. That protects the average guy from being taken advantage of by the contract writer.

In your case, make sure to list both parties' names & addresses. List the make, model, year & VIN of the vehicle. Whether or not it is an "as is" sale or if there is a warranty of some sort. List agreed upon price and how the financing is going to go. Make sure to list the interest rate or that there is no interest rate. Include the date the payments are due & the amount that must be paid. List date of first payment & date of last payment. It's also a good idea to have a 3rd party witness the signing of the contract as well.

I hope that helps. Good Luck !