Keep It Ethical: Recommend legal counsel when required by the transaction; avoid activities that might constitute the unauthorized practice of law. —Article 13
What should common contracts, like listing and sales agreements and leases include?
Specific requirements can vary from state to state, but valid contracts must contain these five essential elements:
- Mutual agreement. All parties recognize that an offer has been made and accepted. All must agree to the other's requirements.
- Consideration. This refers to the benefit received by the parties. It can be money, transfer of ownership, transfer of rights, exchange of services, or anything of value.
- Legally competent parties. These are people or business organizations, such as corporations, whom the law allows to enter into contractual arrangements.
- Legal purpose. A contract requiring any of its parties to violate the law is usually void.
- Legal form. Some contracts must follow a certain form or be drawn in a certain way. Deeds and, in some jurisdictions contracts of sale, for example, aren't valid unless they include a legal description of the property.
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