What makes a contract valid and Enforceable?
As you may already know, entering into contracts is a very serious issue. One to be taken very seriously, and one you should have the best experts on your side. Experience matters! Remember the old saying, "If you think an expert is expensive, try hiring an amateur." (The thought being, that an amateur will get you into much more trouble as they are not as aware of the pitfalls that the expert knows to avoid. And after all, THAT is what you are paying for, isn't it?)
So today's thought for you is what makes a contract valid and enforceable?
There are quite a few items required to make a contract "Valid"
1. There must be mutual consent between the two parties.
2. Legal Purpose - The reason for the contract must be legal in purpose.
3. Voluntary Act of Good Faith - Both parties must not be fraudulent or under duress.
4. Competent Parties - In the state of Utah, all parties must be at least 18 years of age, and must be mentally competent of the requirements placed upon them under contract, and the consequences.
5. Valuable Consideration - Both parties must exchange something of value upon the execution of all parts of the contract.
Additionally, a "Void" contract means it is not enforceable by law. This type of contract is missing one or more of the requirements of a valid contract.
Also, a "Voidable" contract means the contract may have a problem with fraud, misrepresentation, undue influence, or duress, meaning the contract may become void through one of the parties exercising rescission.
Finally, enforceable vs. unenforceable contracts is as simple as having the contract in writing. All real estate contracts must be in writing to be enforceable. While Verbal contracts are still valid, they are NOT enforceable as there is nothing in writing for any mediator or judge to say with conviction who is to do what under contract. So again, ALL real estate transactions MUST be in writing, and both parties must work towards closing escrow.
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