What is a legal agreement?
There are many different types of legal agreement. The first and most common is a contract. There are four elements which are needed in order to create binding contract under the common law of almost all British Common law countries. There must be a clear offer, an acceptance, the intention to create legal relations and consideration. Although the concepts of offer and acceptance are usually quite simple, the idea of intention to create legal relations and consideration can be quite complex and difficult to accurately define. The intention to create legal relations in relation to a contract is usually stated in a written contract and it shows that both parties were aware of the nature of the agreement that they were signing. The final of the four elements required for the creation of a binding contract is consideration. Consideration means that there has been a meaningful exchange of value between the parties. Very commonly, this means that one side will pay money in exchange for the receipt of goods or services. It may also be a contract which purchases a right or a piece of property.
The fundamental difference between a contract and a deed is that there is no consideration required for the formation of a deed. A deed is still valid and binding even if it is for the purpose of the transfer of a gift where no consideration passes between the parties and value only transfers from one side to the other and not in reverse. Otherwise, a deed is very similar to a contract. However, it can been necessary to have a deed in place, sometimes for tax purposes. If you would like to obtain a legal agreement template, we have a number available on this site which you can browse through and select at your leisure.
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