Business and Corporation Law: Elements of a Valid Contract and Contract Law Provisions

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Running Head: BUSINESS AND CORPORATION LAW 0
Business Law
7/15/2018
Student’s Name

Business Law
1
Contents
Question 1........................................................................................................................1
What is a Contract? 1
Elements of a Valid Contract 2
Question 2........................................................................................................................3
Issues 1 3
Rules 1 3
Application 1 4
Conclusion 1 4
Issues 2 5
Rule 2 5
Application 2 5
Conclusion 2 6
References.......................................................................................................................7

Business Law
2
Question 1
What is a Contract?
A contract is an agreement where two parties come together to establish a legal
relationship between them for a lawful consideration. In other words, the term of the
contract can be understood by a single promise or set of promises that are legally
forcible and in case of failure attracts legal liabilities. A contract can be of various types
such as Sale, purchase, employment and so one, but this is to mention here that a
contract must be of commercial nature.
Elements of a Valid Contract
In contract law, some factors are mentioned there, that are necessary to be part
of a contract. These are the elements in absence of that an agreement will remain
merely an agreement and will not be developed into a contract. Following are the
mandatory elements of a valid contract:-
1. Offer:-For a valid contract, there must be an offer and the same must be in
knowledge of the person to whom it has made.
2. Acceptance: - In against an offer, acceptance must also be there from the side of
the person to whom it has been made.
3. Free Consent: - Provided consent must be free from any unethical practices such
as undue influence, fraud, or misrepresentation on the part of the offeror.
4. Intention to build legal relations: - Object of a contract must be to bind the parties
legally. This is the reason for that contract made out of love and affection does
not consider the valid one.
5. Consideration:- For a legally valid contract, consideration must also be there in
the transaction. This is to be stated that a consideration must be sufficient and
the same need not to be adequate.