Contract Formation and Incorporation

This report discusses the importance of contracts and the conditions for their formation. It provides advice on contracts formed in a negotiation and explores the rights and responsibilities of the parties involved. Topics covered include agreement, offer, acceptance, consideration, and contract intention.

CONTRACT FORMATION
AND INCORPORATION

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1 Contract.....................................................................................................................................3
2 Conditions for forming a contract.............................................................................................4
3. Advising Angharad and Bridie on which contracts have been formed in this negotiation......5
4. Rights and responsibilities under the contract.........................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................1

INTRODUCTION
Contract is the agreement which is enforceable by the law that is why in the contract
agreement plays very important role. In the agreement is necessary that both the parties accept
the offer. Understanding of the conditions in forming contract are: agreement, offer, acceptance ,
consideration etc. this report will discuss the advice given to Angharad and Bridie on which
contract have been formed in negotiation and will also discuss the rights and responsibilities of
both under the contract.
MAIN BODY
1 Contract
It is an agreement due to which obligations are raised which are enforced by law. Thus,
for the formation of contract agreement plays an important role. And for the agreement to be
made it is essential that the offer would be made by one party and it should be accepted by the
other party (Kim, 2017). The agreement can be made by any way which includes either the
agreement is made orally or through written mode. However, contract related to the sale of
property or any other big deals should require to be made in writing. Thus, in simple terms a
contract is said to be an agreement which is enforced and recognized by law. It should also be
noted that an agreement is again different from contract because an agreement will come into
existence only after the mutual understanding between the parties regarding rights and
responsibilities while contract is that agreement which is legally enforceable by law (Magazzeni,
McBurney and Nash, 2017).
For the enforcement of contract as per the law it is essential that an offer should be made
by one party and for making the offer it is always essential that two or more than two parties
should exist, there should be acceptance of that offer and there should be an existence of
consideration. A contract is said to be void only if it is impossible to perform the contract,
includes unlawful consideration or the consideration which is benefiting one party on behalf
other party. A void contract is never enforceable by law (San, 2016). The contract can also be
made by an email but the condition is that there should be an exchange of email which means
that one single email can't make a legally enforceable contract because the basic condition of
formation of contract is the existence of offer and acceptance along with mutual consideration.

2 Conditions for forming a contract
There are three main conditions for the formation of contract which may includes agreement,
contract intention and presence of consideration.
Agreement:
It is the most important condition for the formation of contract. An agreement can be
formed either through speaking or through establishing written mode. There are some important
elements which is required for making an agreement (Wyner and Casini, 2017). These elements
generally includes making of offer by the offeror and acceptance of offer by the offeree.
Offer:
It is the basic and important condition of forming the contract. When, some person has
willingness to do something then he will make an offer to some other person. An offer may be
made wither by words or through conduct (Helvacı, 2017). An offer would either be made to a
single person or group of person. It can be revoked at any time before the acceptance but it must
be properly communicated to the offeree.
Acceptance:
The contract will never come to existence until the acceptance will not be made by the
other party or offeree. Thus, it is an important element or condition for the formation of contract.
Simply making of offer will never rise contract unless it will not be accepted by other person. It
is the final assent of the other party with reference of offer (Hampton, 2017). It can also be done
through conduct. It has no legal acceptance or validity unless it will be communicated to the
offerer.
Consideration:
The contract will still be not enforceable until there will be absence of consideration.
Thus, presence of consideration is must for the contract to come into existence. Consideration in
simple terms should be treated as value. It is very essential that consideration should be present
which means that it is not compulsory that consideration should be sufficient but it is compulsory
that it should be adequate (Chalkidis, Androutsopoulos and Michos, 2017). It should not be
related to past which means it will be futuristic along with movable from the promisee to the
promiser.
Intention:

Intention also plays a major part in the formation of contract. Presence of consideration
will itself not made the contract until the intention behind bringing such contract should be legal.
This means that if the contract will be made with unlawful intention then that contract will never
be rise.
Form:
A contract can be formed in any form which means it should either be formed orally or
through written conversation. A contract can either be formed through formal or informal way
(Jaccard, 2018). An informal contract will also be equally enforceable like the formal contract
which was made on paper. All informal contract are legally enforceable but it also has certain
exception like the sale of immovable property or land will never be made through oral or
informal way.
3. Advising Angharad and Bridie on which contracts have been formed in this negotiation
Contract under this negotiation are:
Void ab initio:
It means that the contract is not valid from the beginning which means that they are void. In the
contract the parties are not legally related based on the condition in the agreement because the
agreement was not valid. In general, it can be said that a contract which any of the party cannot
legally enforce will consider as a void.
Under this case study also Bridie ask Angharad to build the wall in her garden where Angharad
responded with the mail saying that 500 euros he will charge for the wall but the offer is open
only for 10 days, within 10 days she responded that she will not accept this quotation. After
some days she emailed him back that she is not comfortable to accept the quotation but now the
price has increased to 600 euros. This contract is not valid because from the starting only both
parties did not get involved in the contract and hence the contract is not formed (Tassopoulos, I.,
2020).
Voidable contract:
It means that when one of the party is not opting for enforcing the contract legally, then the
contract will be voidable but cannot be considered as a void. The conditions which comes under
this are both parties gets the option of enforcement (Yasini, 2017). If any of the party revoke the
contract then the other one can get the compensation. In this case Bridie also decided to cancel
the contract as she is not comfortable with the quotation, so she simply emailed and denied.

Negotiation:
A negotiation is the approach which solve the problem of both the parties, and they come into
acceptance. Under this compromise has done between both the parties to avoid any kind of
arguments. Distributive negotiation fits better in this case (Cao, K. and et.al., 2018).
Distributive negotiation:
It is the kind of hard bargaining negotiation, under this one person gets the benefit so here if on
600 euros Bridie agrees then Angharad will get the benefit because after 10 days he increased the
price and Bridie agrees on that price (Chatterjee, 2018).
4. Rights and responsibilities under the contract
Under this contract no responsibilities will be there as the contract is not formed under
this because both the parties did not agree for the contract.
Rights of Angharad:
He is having the right to sell the products or services. A contract can be in form of verbally or
written, here he has sent email as a offer. This is the formal contract. He is having rights to
increase the price from 500 euros to 600 euros because earlier the 500 euros offer was valid for
only 10 days so now 10 days are finished, so he can definitely increase the price as per the law
he can do this and if he did not negotiate then acceptance have to be made on 600 euros only
(Shivprasad and Surana, 2018).
Rights of Bridie:
She is having the right to buy the specific services or products. She is having the rights for
negotiation also she can said to him that earlier he said that the price will be 500 euros but now
he has increased the price to 600 euros (Szoke-Burke and et.al., 2020). She can even say that
earlier she was not comfortable with 500 euros not now she is because she had heard that his
work is very good, and he finishes work on time.
Earlier is she had agreed with the contract then the contract would be valid and the
agreement between the two parties had been made on 500 euros and then responsibilities of both
the parties had arisen under this situation he is responsible to complete the work of wall building
on the agreed time, and she is also responsible to pay him timely.

CONCLUSION
Through this report it can be concluded that contract is important when doing some
agreement and written contract is the proof that this was the conditions. In this case study offer is
send through mail and rejected on mail itself. All the conditions which is needed in forming a
contract is discussed in detail which include agreement, offer, form etc. advice also given to both
the parties on which contract is formed on negotiation and discussed in detail about the rights
and responsibilities of both the parties.

REFERENCES
Books and journals
Cao, K. and et.al., 2018. Emergent communication through negotiation. arXiv preprint
arXiv:1804.03980.
Chalkidis, I., Androutsopoulos, I. and Michos, A., 2017, June. Extracting contract elements.
In Proceedings of the 16th edition of the International Conference on Articial
Intelligence and Law (pp. 19-28).
Chatterjee, C., 2018. Negotiating techniques in international commercial contracts. Routledge.
Hampton, J., 2017. Contract and consent. A companion to contemporary political philosophy,
pp.478-492.
Helvacı, İ., 2017. Formation of the Contract. In Turkish Contract Law (pp. 3-13). Springer,
Cham.
Jaccard, G., 2018. Smart contracts and the role of law. Available at SSRN 3099885.
Kim, N.S., 2017. Relative Consent and Contract Law. Nev. LJ.18. p.165.
Magazzeni, D., McBurney, P. and Nash, W., 2017. Validation and verification of smart
contracts: A research agenda. Computer.50(9). pp.50-57.
San, T.P., 2016. Contract II Assignment 2016/2017.
Shivprasad, S. and Surana, R., 2018. Minors contracts: a major problem with the Indian contract
act, 1872.
Szoke-Burke, S. and et.al., 2020. Community-Investor Negotiation Guide 2: Negotiating
Contracts with Investors. Available at SSRN 3678396.
Tassopoulos, I., 2020. The'Void Ab Initio'Theory in Comparative Perspective: J. Marshall, H.
Kelsen, and Beyond. Marshall, H. Kelsen, and Beyond (October 15, 2020).
Wyner, A. and Casini, G., 2017. A deep learning approach to contract element extraction. Legal
Knowledge and Information Systems, p.155.
Yasini, M., 2017. The implications of voidable contract (al aqd al-fasid) to Islamic financial
transactions: a study from Shari'ah and legal point of view.
1