The Business Contract Terms
Added on 2020-06-06
13 Pages3931 Words115 Views
Consumer Behaviour
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Essential elements required for the formation of a valid contract....................................11.2 Different types of contract and possible problems associated with them........................21.3 Importance of different terms in a contract......................................................................2TASK 2............................................................................................................................................42.1 Contrast liability in tort with contractual liability............................................................42.3 Importance of vicariously liability to business organisations..........................................5TASK 3 ...........................................................................................................................................63.1 Essentials elements of a valid contract and its importance..............................................63.2 Different types of contract and terms used in it with their impact...................................73.3 Elements of vicarious liability and tort of negligence with different business scenarios8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10
INTRODUCTIONContract is an oral or written agreement between two or more than two parties havinglegal binding and enforceable by law. It is a branch of obligations concerning all rights andduties of parties involved in the contract. Every contract gives rise to legal obligation of partiesinvolved in it due to having various terms (Andrews, 2015). Contracts can be either bilateral orunilateral. Bilateral contracts take place in business environment in which both parties dopromise with each other to fulfil their duties or responsibilities. In situation when one party failsto fulfil his duty then contract breaches and come to an end. Present report is based on essentialand important elements which make a contract valid or enforceable by law. Terms used in acontract and their effect on the its dealings are mentioned in this report. Along with this,vicariously liability of an individual is also described here.TASK 11.1 Essential elements required for the formation of a valid contractA contract is an agreement between two or more than two parties for any kind of dealingenforceable by law. Dealings which does not have ability to be enforceable by law cannot be acontract. All businesses or other types of dealings which have ability to be enforceable by lawcome under the contract. Parties can create contract either verbally or by writing.Following are the essential elements of a valid contract:Offer and acceptance: Offer is the starting point of a legal contract. In this, one partyoffers the other to act in a way for attainment of objectives. Party which showswillingness to other individuals or one who makes the contract is known as offeror andthe other person and another party to whom offer is made is called offeree. So, offer mustbe there or should be communicated with other party in a legal contract. After the offer,second thing which must be there in a contract is acceptance of other party (Vogenauer,2013). When an offer is offered to other party then his acceptance made it a contract. Forexample X offer Y to buy his pen and Y give his acceptance to buy his pen.Intention to create legal relations: Legal intention behind and agreement make it acontract. . For this, every party is responsible to use a legal obligation and should adopt alegal remedy in breach of any condition.Consideration: Consideration means exchange of monetary amount between two partiesor it means that something should be given or done on the behalf of offeror.1
Consideration must be something valuable and it is supplied by the offeror in return ofoffer. For example X will sell his pen to Y in exchange of some considertaion.Capacity: Capacity means both the parties who are entering into the contract should havecompetence to make or enter into a legal or valid contract (Patterson, 2010). Competencemeans both parties entered into contract must be major i.e. above 18 years with soundmind.Privity of contract: It means that both parties entering into a contract should have right tosue against each other. .1.2 Different types of contract and possible problems associated with themThere are different types of contract and each one has some problems associated which are statedas below: Express and implied contract: Under express contract, offer and acceptance are made inwords either oral or written. In opposite situation, when parties do not do such formalexpression on offer and acceptance then it is known as implied contract.Valid contract: A contract between two people of sound mind and enforceable by law isknown as valid contract. One can say that a contract fulfilling all requirements of acontract is known as valid contract.Void contract: Ceasing its enforceability by law, a contract becomes void. After that, acontract lose its legal existence.Unilateral and Bilateral contract: Under unilateral contract, only one party assumes hisobligation in the contract. Opposite to it, in bilateral contract, two parties perform theirduties.Different types of contracts affect the activities of dealing in different ways. Results andeffectiveness; all these depend on the type of contract (Whittaker, 2011). In express contract,both parties promise each other to perform their duties or obligation which clear duties andresponsibilities of both parties. In implied contract, roles and duties of parties are not clear. 1.3 Importance of different terms in a contractWhen two parties or more than two parties enter into a contract then there are somespecific terms which they use. Following are the main terms which are used in a contract:2
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