Contract Elements

• A contract is formed when one party makes an offer and the other accepts that offer. Each party that accepts a promise from another must give up something of legal value in exchange for that promise; this is known as "consideration." For the contract to be binding, all parties must be legally capable of contract, meaning they have mental capacity and generally have reached majority age.
  
  

Oral vs. Written

• Oral contracts (those made in speech rather than writing) are generally valid. However, the common-law Statute of Frauds requires that several types of contracts be written in order to be binding. These include marriage contracts, suretyship contracts and sales of goods worth more than $500.
  
  

Breach

• A legally binding contract creates a duty for the parties to perform their promises. Failure to perform these promises is known as breach of contract. Depending on the type of breach, the injured party may sue for damages or sometimes for performance of the contract.