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Whenever you buy something, you enter into a contract. For a contract to exist, you have to offer to buy something, the seller has to accept your offer, and something of value has to be exchanged.Lawyers refer to these "elements" (essential parts) of a contract as an "offer", "acceptance", and "consideration". Contracts are a regular part of our everyday lives.
For example, suppose you decide that you want to buy a new t-shirt.You go to the store and bring a t-shirt to the clerk. The clerk scans a tag-on the t-shirt and both of you see a price of $20. You take a $20 bill from your wallet and place it on the counter (this is the offer). The clerk takes the money (this is the acceptance) and gives you the t-shirt (this is the consideration – a $20 bill exchanged for a t-shirt). The clerk also hands you a receipt. The receipt "memorializes" (is proof) of the contract, but it is not required to have a valid contract. This transaction represents a contractual relationship between the buyer (you) and the seller (the store).
This contract was for a "good" (a physical object) – the t-shirt. A contract can also be for a "service" (where someone does something for you). An example of a service is when you pay someone to change the oil in your car. Contracts can be for both goods and services. For example, when you go to your car mechanic and pay for motor oil and for them to change the oil in your car. The law is different depending on when there is a problem with a good or a service.
When possible it is best to memorialize (write out) your contracts. A written contract can help you if there is a problem after the transaction. If there is a problem, a judge can read a written contract to determine what you and the other person agreed to. A judge will usually place greater weight on what is written in the contract, then what each person says.
A “binding” contract is an agreement that you sign in writing. The courts are able to enforce binding contracts if someone (or the company) doesn’t live up to their side of the agreement. You cannot enter into a binding contract if you are under 19 years old.
People have to sign binding contracts for many of the goods and services they buy, such as a cell phone, gym membership, and cable service. You should know what you are getting into before you sign any contract.
IMPORTANT: This page provides legal information, not legal advice. If you need legal advice consult a lawyer.
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