Know the Basics: What does Enforceability mean?

Enforceability is like Superman – it gives contracts the power to be enforced by the law.

However, in legal terms, enforceability is a crucial concept in contract law, and it refers to the ability of a contract to be recognized in front of the law. In other words, enforceability ensures that an agreement has all the elements to be legally enforced. 

‍

What is the Enforceability of an Agreement?

But not any contract can be an enforceable contract. For an agreement to be enforced by a court of law, it must meet certain criteria first:

• Offer and acceptance – There must be a clear offer from one party, while the other party must accept the offer.
• Capacity – Both parties must have the legal capacity to enter into a contract. This means that if we want our contract to be enforceable, we can’t be under the legal age and we can’t be under the influence of alcohol or drugs. 
• Consideration – Both parties must receive something of value in exchange. This means that we will both benefit from this exchange. 
• Legality – The contract shouldn’t be illegal or against legal standards. And we can’t create an agreement for something illegal. 

It’s important to note that a contract isn’t enforceable if one of the parties fails to fulfill their obligations under the contract. And if our contracts aren’t enforceable, it’s as if we never had a contract at all. 

‍

What is an example of enforceability?

An example of enforceability from the real world is when we enter into an agreement with a seller to buy a house. We can legally purchase the home only if the contract is enforceable. And this can happen if the contract meets all of the previously mentioned core requirements for a valid contract.

First and foremost, there must be a clear offer made by the house seller to us that we accept. This is the offer and acceptance.

We, as a buyer, must have the mental capacity to understand what we’re doing and to make our own decisions about entering into this agreement. This represents the capacity to enter into the contract.

Even more so, we, as buyers, and the house seller need to understand what’s asked of us and what we are promised in exchange for receiving something else. This represents the consideration from parties.

But we must remember that enforceability is not just about whether or not two people agree. But it’s also whether or not those agreements adhere to specific legal standards. And this represents the legality of the contract. 

‍

Is there a difference between binding and enforceable contracts?

There is no difference between binding contracts and enforceable contracts. A binding contract is any contract that is enforceable. This means that once the contract we signed is enforceable, the contract becomes legally binding. 

‍