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Elements Of Government Contracts

A contract is an officially binding accord amid two or more parties. In a contract, an offer is made, and when it is accepted, both parties benefits. Government contracts use appropriated funds and only an agent of the government can bind the government to a contract. In order for a government contract to be legal and binding, it must contain four essential elements. The four main components of a contract are an offer, acceptance to offer, the intent to generate legal consequences, and consideration. If any of four elements miss in a government contract, the contract is considered null and void.


This is a clear demonstration by one party of its intention to contract with another party, for instance, the government to the other party. The government must provide a clearly stated offer in order to present it either orally, in writing, or in person. This is the first step in forming a contract between two parties, and at this stage, the contract can be withdrawn without a breach of contract.


The second element that should be present in a contract is acceptance. Acceptance is the external manifestation that there can be an agreement between the two parties, thus the offer is accepted. Acceptance of the offer can be given orally, in writing, or by action with the terms set by the offeror. This is the final step in the formation of a contract, and once a contract has been accepted, it can never be withdrawn because it will be a breach of contract. Privity is very vital while making an acceptance as it should be specifically to the offeree in persona.

The intent to Create Legal Consequences

Government contracts require that, both parties should have the intent of entering into a mutual agreement that is legally binding. The agreement between the government and the other party should be enforced by the law because a contract has to have legal relations. Nonetheless, a contract can fail to be legally enforceable if the parties decide that they are not going to be lawfully bound by the contract. And if this is the case, this should be stated in the contract. Even though offer, acceptance, and consideration are present in an agreement, there is no contract, unless there is the presence of the intention to make a legal relationship between the parties.


The fourth element in a contract is consideration. Consideration is that which has been accepted in return of a promise. It is what every party offers in return after an agreement to deliver a promise. When a party to an agreement promises to do something, he/she must get something in return, thus it is the price of the agreement. Consideration must be real, even though it needs not to be adequate.

In conclusion, government contract are very essential to both parties. Nonetheless, these contracts can be discharged when the parties are released from their obligations either through an agreement, performance, breach of contract, and frustrations. All government contracts should have an invitation to offer, the element of consideration, acceptance of an offer, as well as the intent to create a legal liaison between the parties.