Elements and Structure of a Contract
Objectives
- Identify essential elements of a contract
- Navigate the parts of a contract
- Explain them to a client
Explanation
Under Costa Rican civil law, a valid contract requires capacity, consent, a lawful object and cause (causa). Common law systems speak of offer, acceptance and consideration; do not translate 'causa' as 'consideration' – they are different concepts. A typical English contract has: title, parties, recitals ('Whereas…'), definitions, operative clauses, boilerplate and signatures.
recitals
Introductory statements explaining the background of a contract.
“The recitals describe the purpose of the deal.”
consent
Free agreement of the parties.
“Consent obtained by fraud is defective.”
capacity
The legal ability to enter into a contract.
“Minors lack full capacity.”
operative clauses
The clauses that create rights and obligations.
“The price is set out in the operative clauses.”
boilerplate
Standard clauses common to many contracts (notices, governing law, etc.).
“Don't ignore the boilerplate.”