INTRODUCTION Contrcats are those agreemnts which are leagllu enforceable by the law, and are binding on all the parties of the settlement. In today's era it has become need of the time to understand all the legalandregulatoryproceedingswhichareprominentlytrequirdtocarrythecommercial transactions (Christian and Campbell, 2009). Negligence and contract both terms are considered the most importnat part of legislation. In the present report all the essential elemnts of a contract are defined. Along with this the impact of these terms on the business and individulas are also to be highlighted in the study. The study is based on the scenerios and case studies which are having a deep focus on the application of various elemnts of an agreemnet. TASK 1 1.1 The contract is an agreement which is made between the parties and is enforceable by law. It binds both parties with a contract. The court enforce the settlements until there are grounds that resist its legal validity. Peter Abraham has the intention to start a business of building contractor and for him it is essential to understand all those terms which are essentially required to make valid contract. There are some basic features which must be present in a valid agreement these are as under: Offer: This the most prime part which is essential to make a covenant. It shows the readiness of a party for making an agreement, which is accepted by another party. It is applicable for a reasonable duration until another party shows the intention of revoke that particular settlement. Along with this it is also a major part to be considered that silence cannot be regarded as acceptance in a offer (Campbell, 2013). Acceptance: There cannot be a contract until the offer is accepted by another party. And the acceptance can be made orally or in writing. Thus this element shows that both parties should be agree for making a contract. In it the another point is that if the person to whom the offer is madegets agree on some terms and has some new terms then it would not be regarded as an agreement as both the parties must agree on common terms of the covenant. Consideration: It refers a detriment to the person who has made the promise or a benofit conferred to another party. The consideration can be measurable in economic terms. It can be money, goods and services. Another point which is to be noted that the consideration need not be adequate (Pozgar, 2011). Capacity: It is another major element for making an agreement. As both the parties should
be capable for making the contract. As per the law the person who is below the age of 18 is not liable to make the settlement. In the same manner if the person is lacking legal capacity of making an agreement is not capable to create a contract. Thus for making a covenant it is very important to have the capacity of making it. Intention to make the contract: It is a common thing of concern that if the commercial transactions are being made then both the parties of the agreement must have the intention to create it. This can be rejected only in that case where any of the party of the covenant has expressly showed that they are not intended to make the contract. Thus for making a valid agreement it is important for both the parties to have the intention of making that particular contract (Sweet and Schneier, 2012). Thus in above mentioned way all the essential elements of making a valid contract have been discussed. 1.2 Impact of contract in various situations is described as under: Face to face Contract: As per the given scenario if Peter Abraham has plan to make face to face agreements then it can be treated as expressed terms of contracts. In the elements are specifically stated such as there are offer, acceptance and consideration. Further Peter Abraham has a plan to become a building contractor and for this it is required to get entered into the contracts with the parties. In it there can be terms on which the parties can be ready such as age and mental capacity to enter into the settlement. Thus in face to face contracts it is essential to make the agreements by analysing all the essential factors to make the contract and it would be regarded as legal contracts (Dimond, 2009). Written Contracts: The impact of these contracts are much valid than the others. It is the completely legal contract. Peter Abraham can make the agreement in writing as for the contractor business, it is essential to make the settlement in written format. As these contracts are much legally valid then the others. Distance Selling: This kind of contracts are having least effectiveness as these sort of agreements are usually made on telephone and through internet measures. It is not regarded as legal term and for making a valid contract it is essential to have all the factors of a valid agreement. Such as offer, acceptance, consideration, lawful object and capacity to make a covenant. Thus these all aspects should be there while making distance selling transactions or agreements (Sanchez-Lorenzo, 2013).
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