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Who Makes a Contract

In the business world, contracts are an essential part of conducting transactions. They establish a formal agreement between two parties and outline the terms and conditions of their relationship. But who exactly is responsible for making a contract? Let`s explore the different parties involved in creating a legally binding agreement.

The Parties Involved

First, it`s important to identify the parties involved in a contract. Typically, there are two parties:

1. The Offeror – The offeror is the one who presents the terms of the contract. They are the party who initiates the agreement and proposes the terms.

2. The Offeree – The offeree is the one who accepts the offer made by the offeror. They are the party who agrees to the terms proposed in the contract.

Together, the offeror and offeree create a legally binding agreement by agreeing to the terms outlined in the contract.

The Process of Making a Contract

The process of making a contract involves a few key steps:

1. Offer – The offeror presents the terms of the contract to the offeree.

2. Acceptance – The offeree agrees to the terms of the contract proposed by the offeror.

3. Consideration – Both parties must give something of value in exchange for the agreement. This is called consideration and could be money, services, or goods.

4. Legal Capacity – Both parties must have the legal capacity to enter into a contract. This means they must be of legal age and have the mental capacity to understand the terms of the agreement.

5. Mutual Consent – There must be mutual consent between both parties. This means they must both agree to the terms of the contract willingly and without coercion.

Once these steps have been completed, the offeror and offeree have created a legally binding agreement that outlines the terms and conditions of their relationship.

Conclusion

In conclusion, both the offeror and offeree play an important role in making a contract. The offeror proposes the terms of the agreement, and the offeree accepts them. Together, they establish a legally binding agreement that ensures both parties understand the terms and conditions of their relationship. By following the steps outlined in the process of making a contract, businesses can create agreements that protect their interests and ensure a fair and equitable exchange.