Law Assignment : Important elements of a valid contract
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Added on 2020-10-23
Law Assignment : Important elements of a valid contract
Added on 2020-10-23
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Table of ContentsIntroduction.................................................................................................................................................3Task 1 Understanding crucial elements of a authentic contract...................................................................31.1 Explaining the importance of the essential elements required for the formation of a valid contract......31.2 Discussion on the impact of different types of contract.........................................................................41.3 Analysing terms in contracts with reference to their meaning and effect...............................................5Task 2 Applying the elements of contract in business context.....................................................................62.1 Application of the elements of contract in the business scenarios.........................................................62.2 Application of the law on terms in different contracts...........................................................................62.3 Evaluation of the effect of different terms in given contracts................................................................7Task 3 Explanations on liabilities in businesses..........................................................................................93.1 Contrast liability in tort with contractual liability..................................................................................93.2 Explanation on the nature of liability in Negligence..............................................................................93.3 Explanation on how a business can be vicariously liable.....................................................................10Task 4 Principles of liability in negligence in business situations.............................................................114.1 Applying the elements of the tort of negligence and defences in different business situations............114.2 Applying the elements of vicarious liability........................................................................................11Conclusion.................................................................................................................................................11Reference List............................................................................................................................................121
IntroductionIn this project, we have tried to decipher the crucial elements of valid contract explainingthe importance of these elements for formulation. We have further discussed the different typesof contracts. The implicational factors of these have been elaborated during the project.Explanation of liabilities in business scenario has been an integral part of this project. Principleson liabilities have also been discussed later.Task 1 Understanding crucial elements of a authentic contract1.1 Explaining the importance of the essential elements required for the formation of a valid contractA contract basically is an understanding between two parties regarding a activity in anymanner. An agreement must have essential elements in becoming an official contract.Essential element that a valid contract should contain:Offer and acceptance:The beginning of a contract begins with one party offering andone party accepting his offer regarding something. When one party grabs the offer, the offerbecomes an agreement. Mutual consent of parties:Both parties must be willingand not have any objection to theactivity of the other party in the said regard.Legal Obligation: An agreement must create or pose legal threats to a party incuse he orshe is not able to fulfil the promised activitiesFree consent of parties: Here it can be stated that if the parties don’t willingly sign thecontract it means they have been forced and not per their will. Therefore, it cannot be legal and isvoidParties should be competent to contract: This means that legally the parties areempowered by the legislation of the resident country to agree or disagree in this manner.Generally, the competency depends on majority whether the agent have reached the specified agerequired in making the decision. The mental state the agent is in and is fit in that regard. He isnot disqualified by law to enter any kinds of contractLawful object: The activity on which the parties are getting into an agreement must belawful and is ratified by the house of law and should not be fraudulent, unlawful or contradictory2
to the public policy. If the activity is not legal or is flawed, it is not enforceable by law(Carrolland Buchholtz, 2014, p.133)Not declared void: There are certain agreements which are not declared void by thegovernment of countries or legal authorities anybody getting into any such agreement or contractshall be deemed to be void and hence and activity thereof will not be enforceable by law.Possibility of performance: The agreement must be capable of being performed. If the partieshave agreed on a contract that contains any promise that cannot be fulfilled at any point of timethen the agreement in that regard will be considered as invalid. Impossibility makes anagreement void regardless of the parties being aware or unaware.Certainty in meaning of agreement: The meaning of an agreement must be certain orshould be capable of being made certain. If the terms of the agreement are vague, confusing oruncertain, it shall lead to no binding obligations for partiesLegal formalities: A contract is made by word, spoken or written. The statutoryrequirement defines the nature of the contract. Otherwise it shall not be enforceable bylaw(MacCormick and Weinberge, 2013, p.111).1.2 Discussion on the impact of different types of contractTypes of Contracts Contracts under Seal:A enforceable legal document is a document if it is only stampedwith seals. The seal is representing that the individuals have intended to entail legalconsequences which adds value. The seal isrepresenting the symbol of the acceptance of thelegal effect and the consequence of the agreement. Express Contracts:Express contracts are contracts which are acceptances which areeither verbally accepted or are accepted in writingImplied contracts:The contracts which have implications on the people signing thecontract either legally or any measures thereof are called implied contracts.Executed and Executor Contracts: An executed contract is one contract which hasalready been signed and is complete. An executor contract is one contract where there are furtherrequirements for the contract to imply and be signed by the agents.Unconscionable Contracts: An unconscionable contract is a contract where the contractis forced on come body that has a higher bargaining power and has no say in signing it (Ng etal.2013, p.734). 3
1.3 Analysing terms in contracts with reference to their meaning and effectTerms in contract are the clause and promises that the parties are bound to and to otherstatements made in pre-contract promises that have been made. Contracts contains differenttypes of points here the conditions are more important than the rectification measures. Basically,first letter of specific terms needs to be in a capital letter in order to make understandable forboth parties. In business contracts, terms are known as responsibilities, duties, confidentiality,dates, payments and all the expectations which were expected by two parties that are involved ina specific agreement (Durkheim, 2014, p.102). Thus, some of the major terms are discussed asfollows which is common in each or every contracts. Conditions- One of the most indispensable term in contract is condition on which entireagreement is going to based such as; third parties are not allowed to involved, minors arenot allowed to engage in legal contracts and so on. Thus, conditions is consider as mostnecessary element in forming a legitimate contract as it helps in maintaining the dignityas well as clear all the doubts between two parties. It means, conditions in a contract are amajor influence as parties are work on the basis of conditions in order to maintainconfidentiality. For example; official agreement between business partners is based onpartnership deed in which some of the major conditions are clearly stated that; profits andlosses are shared by both partners as well as both are having rights to make decision onthe behalf of whole business. Warranties- It’s all about assurance or guarantee which is given by parties to theirpartners to fulfil the conditions which is written in their legal contracts. In fact, thesewarranties are given in distinct manners such as; either by signing some legal papers,depositing something very precious or costly materials as a warranty likes gold, paper ofhouses and so on. Thus, it shows that this term is also having influence on both theparties as they become bound to fulfil the terms of the contract. For example; acquiringloan by businessmen’s for their projects by giving papers of organization as a warranty orsecurity that they will definitely fulfils the order. 4
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