Legal Procedure for Agreement

Legal Procedure for Agreement: What You Need to Know

Agreements are an essential part of any business transaction, whether it’s a simple purchase or a complex partnership. However, before agreeing to anything, it’s important to understand the legal procedures involved in creating a legally binding agreement.

Here are the steps you need to follow to ensure that your agreement is legally binding:

1. Offer and Acceptance

The first step in creating a legally binding agreement is an offer. One party makes an offer to the other, outlining the terms of the proposed agreement. The second party can either accept or reject the offer.

If the second party accepts the offer, it becomes a legally binding agreement. However, if the second party rejects the offer, the agreement is not binding.

2. Consideration

Consideration is a legal term that refers to something of value that is exchanged between the parties. In most cases, consideration is a payment or a promise to pay for goods or services. It’s important that both parties exchange consideration for an agreement to be legally binding.

Without consideration, an agreement is simply a promise, which is not legally enforceable.

3. Capacity

Both parties must have the legal capacity to enter into the agreement. This means that they are of legal age, mentally competent, and not under duress or coercion.

If one of the parties lacks capacity, the agreement may be considered void or unenforceable.

4. Legality

The agreement must be for a legal purpose. Any agreement that involves illegal activity, such as a contract for drugs, is not legally binding.

Additionally, an agreement that violates public policy, such as a contract that restricts a person’s right to work, is also not enforceable.

5. Intent

Both parties must have the intent to be legally bound by the agreement. This means that they understand the nature and consequences of the agreement and agree to be bound by its terms.

If one of the parties did not have the intent to be bound, the agreement may not be legally enforceable.


Creating a legally binding agreement involves more than just agreeing to terms. By following these legal procedures, you can ensure that your agreement is enforceable and protects your rights and interests.

Remember that it’s always advisable to seek legal advice when entering into an agreement, especially if it’s complex or involves a significant amount of money.