ContractsCounsel Logo

Legality In Contracts

Updated: March 28, 2023
Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 9,865 reviews
No Upfront Payment Required, Pay Only If You Hire.
Home Blog Legality In Contracts

Jump to Section

Legality in contracts is an essential component of enforceable agreements. A single misstep can result in a host of legal problems.

Below, we’ve outlined everything you need to know about contract legalities:

What Is Legality of Purpose in Contract Law?

The legality of purpose in contract law is the terms and conditions in legal documents that are legally binding and enforceable. They often contain mutually agreed-upon obligations and requirements. Every enforceable contract must have the legality of purpose.

Here is an article that discusses the legality of purpose in contract law.

What is a Contract?

Contracts , also known as agreements, are legally binding documents between two or more parties. They come in a written or oral format. A signed contract is more straightforward to enforce than a verbal one.

Contracts are built on trust. If one party doesn’t hold up their end of the agreement, the other party can enforce the contract provisions in civil court. You should also use clear, concise language versus complicated wording, known as “ legalese .”

This web page also discusses contracts.

Why is Legality Important in Contracts?

In any business transaction, a written contract is essential. Agreements can serve as future references, part of the business’ policies, and evidence.

Here are six reasons why legality in contracts is essential:

Reason 1. Specification

Specification is one of the many reasons a written contract is necessary for your business. It can legally serve as proof of mutually agreed-upon details.

This element also clarifies the terms of a contract between a company’s owners or investors, as well as the services provided by a third party and the payment obligations to hired workers. As legal proof, you should state these obligations in all of your written contracts.

Reason 2. Avoids Misunderstandings

A written contract is usually produced between parties entering into a business agreement during a sensitive business venture. The main goal of this formal written agreement is to allow each concerned party to read and understand the terms and conditions .

These terms include each party’s expectations and what they have agreed to after a discussion. The written contract will also remind both parties that this is a serious business transaction.

Reason 3. Reassurance

A written contract can provide security and peace of mind to all parties involved. For example, employment contracts lay out the terms of the relationship between the employer and the employee. These terms specify the employee’s duties and responsibilities, payment, and overall relationship.

An employer is legally responsible for paying an employee’s wages and other benefits as required by law. In contrast, the employee must perform their assigned duties as outlined in the job description. When a party breaches the terms and conditions, the contract adequately protects the aggrieved parties.

Reason 4. Confidentiality

The ability to agree to confidentiality and non-disclosure provisions protecting sensitive information. This feature is one of the ultimate benefits of having written contracts in business transactions .

The concerned parties are legally bound to keep the transactions and information shared between them confidential as part of the agreement. Any party who violates this confidentiality agreement will be held liable under the contract.

Reason 5. Privacy

When one of the parties to a contract breaks it, the written agreement becomes vital. It will be used as a general reference to determine to what the parties agreed. They can also reveal who is truly at fault.

Having a written contract readily available reduces the chances of bringing the issue to court. It can even prevent the dragging out of litigation longer than necessary, which can be costly and time-consuming.

Reason 6. Creates a Bonafide Paper Trail

A written contract serves as an official record of the terms upon which the parties have agreed. It may, for example, specify the:

  • Level of authority given to business owners or managers
  • Completion date of any work contracted to a service provider
  • Payment of completed work
  • Stating the terms of when to terminate a contract .
Meet some lawyers on our platform

Zachary J.

301 projects on CC
View Profile

Brian W.

4 projects on CC
View Profile

Benjamin E.

98 projects on CC
View Profile

Kelvin R.

22 projects on CC
View Profile

What Determines Legality in Contracts?

When a contract meets the legal requirements, it is legally enforceable. An agreement usually entails the exchange of goods, services, or money, or the promise of any of these. Although most oral contracts are legally binding, some contracts may require additional formalities.

4 Requirements for a Valid Contract

The four elements of a contract are essential to creating a binding agreement, regardless of the types of contracts you use. Let’s take a closer look below at how to write a contract that is valid below:

Requirement 1. Offer

Every legal contract begins with a verbal or written offer from one party to another, and written agreements prove that a contract exists.

The offer is a proposal for a relationship’s terms. It can also include any number of rights, obligations, warranties, and conditions that the parties must meet.

An offer does not become formally valid until received by the intended counterparty, also known as an offeree. The offeree has the option to revoke or counter the offer before accepting it.

Before the offeree accepts the offer, the offeror can withdraw it. A counteroffer will cancel the original offer, preventing the offeree from accepting it later.

Requirement 2. Consideration

An exchange of consideration must occur for a contract to remain valid. Consideration may be a vague, difficult-to-define concept, and this assertion is due to consideration presenting itself in different ways.

Depending on the scope of the transaction and the parties’ motivations, consideration can take various forms. In a contract, consideration is the sum of each party’s rights and obligations.

The following are examples of common types of consideration:

  • Money
  • Actions
  • Restrictions

The consideration must also be mutual, which means that each party must carry out the contract’s terms.

Requirement 3. Acceptance

Acceptance is the third component of a valid contract. Acceptance can be verbal or written, just like an offer.

For most cases, acceptance necessitates some form of action on the part of the offeree. In other words, a party’s inaction, silence, or other passiveness as evidence of contract acceptance will not suffice.

Conditional acceptance is possible in some contracts. Acceptance that creates a valid agreement through a party’s performance is possible in some cases.

Requirement 4. Intent

The final element of a contract is that the parties must mutually agree upon the terms. Intent is each party’s awareness of and willingness to comply with the agreement.

On the surface, this may appear to be an unusual requirement. However, in written agreements, questions of intent and whether the parties had an actual “meeting of the minds” arise frequently.

Examples of Legality in Contracts

Need an example of legality in contracts to solidify your understanding? Let’s take a look at one below:

  • Tom is a consultant
  • Jim owns and business and needs Tom’s services
  • Tom agrees to help Jim in exchange for payment
  • Tom drafts up an agreement and goes over it with Jim
  • Jim agrees to the terms and signs on the signature line
  • Tom agrees to the terms and signs on the signature line
  • The legality in contracts is upheld in this situation.

Contract lawyers in your state can help you draft the terms, conditions, and warranties. They ensure that your contract clauses are perfect for your unique situation, from contract drafting to an executed contract.

Post a project in ContractsCounsel’s marketplace to get flat fee bids from contract lawyers for your project. All lawyers are vetted by our team and peer-reviewed by our customers for you to explore before hiring.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Lawyers

Emmanuel K. on ContractsCounsel
View Emmanuel
5.0 (2)
Member Since:
July 26, 2023

Emmanuel K.

Corporate Lawyer
Free Consultation
Little Rock, Arkansas
2 Yrs Experience
Licensed in GA
University of Georgia School of Law

I am a corporate Attorney licensed in the state of Georgia and Ghana. My professional career started in 2016 as a litigator in a private law firm in Ghana. Subsequently in 2018, I moved in house to work for the University of Ghana and this is where my corporate transactional work experience began. Since coming to the US in 2019, I have gained significant transactional experience through internships at Verizon and Tricentis (a software testing company) during law school at UGA. Since graduating from UGA law school, I have worked as a corporate transactional attorney of an AmLaw 200 firm. In that role, I helped foreign companies entering the US market to establish a presence and comply with applicable corporate laws while doing business. I also assisted customers and service providers in the software and technology industry by reviewing SaaS and similar contracts. Also, I helped energy utilities in the renewable energy space navigate regulatory and policy issues and establish contractual business relationships through contract reviews.

Merry A. on ContractsCounsel
View Merry
5.0 (8)
Member Since:
July 26, 2023

Merry A.

Free Consultation
Lakebay, WA
38 Yrs Experience
Licensed in WA
Seattle University School of Law (formerly UPS School of Law) Juris Doctorate

Merry Kogut is a licensed attorney based in Washington State who has been a legal expert on JustAnswer since 2008 specializing in employment law, consumer protection and discrimination issues. She has been an attorney handling WA State phone consultations for Arag Legal Insurance since April, 2023. She has also been an attorney in private practice since 1986, and was in-house legal counsel for multiple WA State government agencies. She brings nearly 50 years combined legal and professional writing experience. Earlier in her career, Merry served as a law clerk for the Washington State Court of Appeals, and as a discrimination specialist, investigator and legislative liaison. She also helped establish the “Legal Writing Institute,” a national association of legal writing instructors and administrators. Merry earned her law degree from the Seattle University (formerly University of Puget Sound) School of Law.

Luiza D. on ContractsCounsel
View Luiza
Member Since:
November 1, 2023

Luiza D.

Business/IP Lawyer
Free Consultation
San Diego, California
6 Yrs Experience
Licensed in CA
Thomas Jefferson School of Law

I represent business owners throughout California with their business, IP and employment law matters.

Brett S. on ContractsCounsel
View Brett
Member Since:
September 15, 2023

Brett S.

Litigation and Contract Attorney
Free Consultation
Chicago, Illinois
6 Yrs Experience
Licensed in IL
University of Illinois

I attended the University of Illinois- College of Law on a full merit scholarship. While in law school, I was a 711 Attorney at the Lake County State's Attorney's Office, specializing in traffic and misdemeanor cases. After graduation, I served as in-house counsel for one of the largest insurance companies in the world, managing thousands of cases from initial intake to trial. Upon leaving this position, I accepted a role as Legal Counsel to the Illinois Senate Minority Leader. There, I advised Senators on legislative matters, labor and employment law, and complex constitutional questions. After leaving public service, I accepted a role at a mid-size Chicago-based law firm, where I practice insurance defense and litigation. In addition to this, I also serve as outside general counsel to a food brokerage business, where I handle all of their labor and employment matters.

Zachary D. on ContractsCounsel
View Zachary
Member Since:
July 26, 2023
Charles M. on ContractsCounsel
View Charles
Member Since:
July 26, 2023

Charles M.

Free Consultation
21 Yrs Experience
Licensed in IL
DePaul University

Mr. McElvenny has extensive experience handling and developing strategy for complex commercial and real estate cases. He’s drafted hundreds of complaints ranging from simple breaches of contract to complex commercial claims including breach of fiduciary duty, constructive trusts and misappropriation of trade secrets. He has an excellent record in trial, arbitration and mediation. He also has significant experience in motion practice in both state and federal court. Through his work in corporate law, Mr. McElvenny has developed considerable experience with Limited Liability Company member disputes and general corporate governance. He’s drafted a number of industry-specific documents such as Operating Agreements (for Limited Liability Companies), commercial leases, settlement agreements and employment contracts. Mr. McElvenny has also represented criminal defendants in felony matters and assisted in the defense of civil matters arising from alleged SEC violations. He has represented individuals appearing before the Illinois Department of Professional Regulation as a result of SEC proceedings. After graduating with a B.A. in Philosophy, Mr. McElvenny proceeded from Loyola University-Chicago to DePaul University College of Law, receiving his JD from that institution in 2002. In 2010, he earned his Master’s of Science in Accounting from Loyola University-Chicago’s Graduate School of Business. Mr. McElvenny was selected to Illinois’ Super Lawyers Rising Stars in 2010, 2012 and 2013.

Marykaren R. on ContractsCounsel
View Marykaren
Member Since:
July 26, 2023

Marykaren R.

Privacy and Data Protection Counsel
Free Consultation
Boulder, CO, USA
6 Yrs Experience
Licensed in DC
University of Wyoming College of Law

I provide legal advice and guidance on complex privacy laws and regulations including: Privacy Policies, incident response & state data breach notification laws, privacy risk and risk assessments, PIAs/DPIAs, contracts, and policies and procedures to help build consumer trust and ensure compliance. I am successful by encouraging collaboration with stakeholders to ensure a successful and sustainable program.

Find the best lawyer for your project

Browse Lawyers Now

Need help with a Contract Agreement?

Post Your Project

Get Free Bids to Compare

Hire Your Lawyer

See All Contracts Lawyers
other helpful articles

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

View Trustpilot Review

Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.

View Trustpilot Review

I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.

View Trustpilot Review

I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.

View Trustpilot Review

How It Works

Post Your Project

Get Free Bids to Compare

Hire Your Lawyer

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city