Consideration and legality are two public policy.

A contract that is illegal or

important elements of a contract.
Consideration is the bargained-for
exchange between the parties to a contract.
Legality means that the contract must not
be for an illegal purpose or contrary to law,
morals, good customs, public order, or
public policy.
Consideration
Consideration is the exchange of something
of value between the parties to a contract.
This can be goods, services, money, or a
promise to do or refrain from doing
something. Consideration is essential to the
formation of a contract because it provides
the basis for the bargained-for exchange
between the parties. Without consideration,
a contract is unenforceable.
There are three main types
consideration:
 Executory consideration: This
promise to do something in the future.
 Past consideration: This is something that
has already been done. Past consideration
is generally not sufficient to support a
contract.
 Illusory consideration: This is a promise
that is so vague or indefinite that it is not
enforceable.
Legality
Legality means that the contract must not
be for an illegal purpose or contrary to law,
morals, good customs, public order, or
contrary to public policy is unenforceable.
There are a number of factors that can
make a contract illegal or contrary to
public policy. These include:
 The contract is for an illegal purpose. For
example, a contract to commit a crime or to
engage in other illegal activity is
unenforceable.
 The contract is contrary to law. For
example, a contract that violates a statute or
regulation is unenforceable.
 The contract is contrary to morals. For
example, a contract that is based on fraud
or deceit is unenforceable.
 The contract is contrary to good
customs. For example, a contract that is
based on gambling or prostitution is
of unenforceable.
 The contract is contrary to public order.
is a For example, a contract that is a threat to
national security is unenforceable.
 The contract is contrary to public policy.
For example, a contract that is a restraint of
trade is unenforceable.
If you are considering entering into a
contract, it is important to make sure that
the contract is legal and enforceable. You
should consult with an attorney to make
sure that the contract is not for an illegal
purpose or contrary to law, morals, good
customs, public order, or public policy.
 Contract formation and enforceability are
two closely related concepts in contract law.
Contract formation refers to the process of
creating a legally binding agreement
between two or more parties. Enforceability
refers to the ability of a court to compel the
parties to perform their obligations under the
contract.
In order for a contract to be enforceable, it
must meet certain essential elements.
These elements vary depending on the
jurisdiction, but they typically include:
 Offer: An offer is a proposal to enter into a
contract. It must be made with the intent to
be bound and must be definite and certain
in its terms.
 Acceptance: Acceptance is the agreement
to the terms of an offer. It must be
unconditional and communicated to the
offeror.
 Consideration: Consideration is the
exchange of something of value between
the parties. It can be in the form of goods,
services, money, or a promise to do or
refrain from doing something.
 Mutual assent: Mutual assent is the
meeting of the minds of the parties. This
means that both parties must agree to the
same terms of the contract.
 Capacity: Capacity is the legal ability to
enter into a contract. This means that the
parties must be of legal age and mental
competence.
 Legality: Legality means that the contract
must not be for an illegal purpose.
In addition to these essential elements,
there are a number of other factors that
can affect the enforceability of a
contract. These include:
 Formalities: Some contracts, such as
contracts for the sale of land, must be in
writing to be enforceable.
 Misrepresentation: A contract may be
voidable if it was entered into based on a
misrepresentation of fact.
 Mistake: A contract may be voidable if it
was entered into based on a mistake of fact.
 Duress: A contract may be voidable if it was
entered into under duress.
 Undue influence: A contract may be
voidable if it was entered into under undue
influence.
If you are considering entering into a
contract, it is important to make sure that
the contract is valid and enforceable. You
should consult with an attorney to make
sure that the contract meets all of the
essential elements and that there are no
other factors that could make the contract
unenforceable.
Here are some additional things to keep in
mind about contract formation and
enforceability:
 A contract can be formed orally or in writing.
However, some contracts, such as contracts
 for the sale of land, must be in writing to be
enforceable.
 A contract can be express or implied. An
express contract is one that is stated
explicitly, while an implied contract is one
that is inferred from the conduct of the
parties.
 A contract can be unilateral or bilateral. A
unilateral contract is one in which only one
party makes a promise, while a bilateral
contract is one in which both parties make
promises.
 A contract can be executory or executed.
An executory contract is one in which both
parties have not yet performed their
obligations, while an executed contract is
one in which both parties have performed
their obligations.
A breach of contract occurs when one or
more parties to a contract fail to perform
their obligations under the contract. A
breach of contract can be material or minor.
A material breach is a breach that defeats
the purpose of the contract, while a minor
breach is a breach that does not defeat the
purpose of the contract.
Here are some examples of breaches of
contract:
 A contractor fails to complete a construction
project on time.
 A buyer fails to pay for goods or services.
 A seller fails to deliver goods or services.
 A party to a contract makes a
misrepresentation of fact.
 A party to a contract fails to perform their
obligations under the contract due to a
mistake.
 A party to a contract is forced to enter into
the contract under duress.
 A party to a contract is unjustly influenced to
enter into the contract.
If a party to a contract breaches the
contract, the non-breaching party may have
a number of remedies available to them.
These remedies may include:
 Damages: Damages are a monetary award
that is intended to compensate the non-
breaching party for the losses they suffered
as a result of the breach.
 Specific performance: Specific performance
is a court order that requires the breaching
party to perform their obligations under the
contract.
 Rescission: Rescission is a court order that
cancels the contract and restores the
parties to their original positions.
 Restitution: Restitution is a court order that
requires the breaching party to return any
money or property that they received as a
result of the breach.
 The specific remedy that is available to the
non-breaching party will depend on the facts
and circumstances of the case.
A business entity is a legal structure that a
business owner chooses to operate their
business under. There are many different
types of business entities, each with its own
advantages and disadvantages.
Here are some of the most common types
of business entities:
 Sole proprietorship: A sole proprietorship is
a business that is owned and operated by a
single individual. It is the simplest and most
common type of business entity. Sole
proprietorships are easy to form and
operate, and they do not require any special
filing with the government. However, sole
proprietors are personally liable for all of the
debts and obligations of their business,
which means that their personal assets can
be seized to satisfy business debts.
 Partnership: A partnership is a business that
is owned and operated by two or more
people. There are two main types of
partnerships: general partnerships and
limited partnerships. In a general
partnership, all of the partners are
personally liable for all of the debts and
obligations of the business. In a limited
partnership, there are general partners and
limited partners. General partners are
personally liable for all of the debts and
obligations of the business, while limited
partners are only liable for the amount of
money that they invested in the business.
 Limited liability company (LLC): An LLC is a
hybrid business entity that combines the
features of a corporation and a partnership.
LLCs are easy to form and operate, and
they offer limited liability protection to their
owners. This means that the owners of an
LLC are not personally liable for the debts
and obligations of the business, which
means that their personal assets cannot be
seized to satisfy business debts.
 Corporation: A corporation is a legal entity
that is separate and distinct from its owners.
Corporations offer limited liability protection
to their shareholders, which means that the
shareholders of a corporation are not
personally liable for the debts and
obligations of the corporation. Corporations
are also more complex to form and operate
than sole proprietorships, partnerships, and
LLCs.
A corporation is a legal entity that is
separate and distinct from its owners.
Corporations offer limited liability protection
to their shareholders, which means that the
shareholders of a corporation are not
personally liable for the debts and
obligations of the corporation. This is one of
the key advantages of corporations over
other types of business entities, such as  Shareholder agreements: These
sole proprietorships and partnerships. agreements set out the rights and
Corporations are governed by contract law. obligations of shareholders, such as their
This means that the rights and obligations of voting rights, dividend rights, and
shareholders, directors, and officers are preemptive rights.
spelled out in contracts. These contracts  Employment agreements: These
can be express (written) or implied agreements set out the rights and
(unwritten). obligations of employees, such as their
One of the most important contracts in salary, benefits, and termination rights.
corporate law is the shareholder agreement.  Mergers and acquisitions: These contracts
This agreement sets out the rights and are used to combine two or more
obligations of shareholders, such as their companies into a new company.
voting rights, dividend rights, and  Loan agreements: These contracts are used
preemptive rights. to borrow money from a lender.
Another important contract in corporate law  Real estate contracts: These contracts are
is the employment agreement. This used to buy, sell, or lease real estate.
agreement sets out the rights and If you are involved in any of these areas of
obligations of employees, such as their corporate contract law, it is important to
salary, benefits, and termination rights. consult with an attorney to make sure that
Corporations are also subject to a number you understand your rights and obligations.
of statutes and regulations. These statutes
and regulations set out the requirements
that corporations must follow in order to
operate legally. For example, corporations
must file annual reports with the
government and they must hold annual
meetings of shareholders.
Contracts play an important role in
corporate law. They help to ensure that the
rights and obligations of shareholders,
directors, and officers are clear and that
corporations are operated in a legal and
ethical manner.
Here are some of the key areas of corporate
contract law: