Report - Various Aspects Of A Valid Contract

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Added on 2020-02-05

Report - Various Aspects Of A Valid Contract

Added on 2020-02-05

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ASPECTS OF CONTRACT

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TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................31.1 Explain the importance of the essential elements required for the formation of a validcontract.........................................................................................................................................31.2 Discussing the impact of various types of contract ..............................................................41.3 Analyse terms in contracts with reference to their meaning and effect.................................5TASK 2............................................................................................................................................52.1 Apply the elements of contract in given business scenario..................................................52.2 What are the consequences of classifying terms in different contracts.................................62.3 Evaluate the effect of different terms of law on terms and exemption clause.......................6TASK 3............................................................................................................................................73.1 Comparing the liability in tort with contractual liability ......................................................73.2 Explain the nature of liability in Negligence.........................................................................83.3 How business can be vicariously liable.................................................................................9TASK 4............................................................................................................................................94.1 Element of tort of negligence and defences in different situation ......................................94.2 The elements of vicarious liability in the situation..............................................................10CONCLUSION .............................................................................................................................11REFERENCES..............................................................................................................................122

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INTRODUCTIONA contract is a voluntary agreement between two or more parties that is enforceable atlaw as legal binding agreement. In other words, it is also defined as voluntary, intentional andlegal binding agreement between two or more competent parties. The development of a validcontract basically needs an offer, acceptance, consideration and mutual interest to be bound. Thecontract is also treated as valid promise made by one individual to other (Owen, 2007). It isimportant for the parties to follow the law of obligations specified in the contract. In the presentreport, various aspects of contract will be studied. The essential elements needed for thedevelopment of a valid contract will be discussed. The impact of various types of contract will bedescribed. Further , the difference between tort law and contractual liability will be highlighted.The concept of vicarious liability will also be elaborated. TASK 11.1 Explain the importance of the essential elements required for the formation of a validcontractAll the contracts are agreements but it is not necessary that all agreement must becontract. Only those agreements that are legally enforceable by law are contract. According tothis aspect, a agreement will be treated as contract only if it possess all the essential elements ofa valid contract (Appleman, Appleman and Holmes, 2014). The description of which is asfollows:Offer: It is an important constituent needed for the development of a legally bindingcontract. The offer must be lawful by one party and must be capable of gaining legalacceptance by other party (Ayres, 2012). It is also defined as expression of disposition oncertain terms made with the purpose that it will be legally binding as soon as it isaccepted by the other party to which it is addressed. For instance, a tender by entity tosell 100 carton of bread at price of $50 will be stated as making a offer. Acceptance: The validity of contract depends upon the acceptance by the other party toperson or entity it is addressed. The acceptance must not carry any conditions and can begiven in writing or verbal statement ( Lehto and Nysten-Haarala, 2010s). 3

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Intention: As per this aspect, the party involved must have purpose to enter into contractto ensure its validity. The prime objective must be to develop a legal relationship andassure that agreements can be implemented in accordance with law. Lawful Consideration: It means both the party should get something in return to assistthe validity of contract (Huyssteen and et.al., 2010). The consideration must havemonetary worth. “Tweddle V Atkinson [1861] EWHC QBJ57” case clearly shows thatparty made contract without legal consideration could not make a valid contract. Free consent: The consent to enter into contract must be free and not on the grounds offactors like, coercion, undue influence, fraud, misrepresentation etc. Therefore, partiesmust be willingly agreed to enter into contract. Such as, A threatens B that he will his sonif he don't sell its property to A at less than market price. Here, contract is not free havingconsent as it is caused by coercion (Kaleva and Tikkanen, 2011). Capacity of parties: As per this aspect, both the parties to the contract must have legalcapacity to enter into contract. In this respect, they should not be of unsound mind,minor (below the 18 years age), insolvent etc. 1.2 Discussing the impact of various types of contract There are different types of contract that are basically entered by party with differentpurpose. The major types are explained as follows:Written contract: It is a written document that carries signature of bot the parties whoagree to abide by the rules mentioned in the contract. It have both advantages anddisadvantage. Such as, it serve as a evidence and facilitate in resolving the issues anddisputes easily (Fraser, 2012). The disadvantage relates to lack of understanding on keyareas of the agreement. Oral contract: It is a kind of contract that is verbally entered by the party. It carriesnegative impact as the parties can deny later and disagree to fulfil their obligations whilethe other party cannot sue it due to lack of unavailability of written record. Distance selling contract: It is kind of contract made through digital channels, internet,video-conferencing etc (Webb, 2013). The parties to contract are situated far from eachother. Such type of contract is used by e-based entities like Amazon to influence the4

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