Valid Contract Essay

2538 Words6 Pages

LO1 Understand the elements of a valid contract in a business context 1.1 Explain the importance of the essential elements required for the formation of a valid contract. There are several essential elements that are needed in the formation of a contract namely offer and acceptance, capacity, consideration, intention to create legal relations, consideration and privity of contract. Offer & Acceptance An offer is the willingness to contract with a specific set or terms made by the offeror that if accepted that person or individual is bound by a contract. Acceptance An acceptance is the absolute agreement to a contract and its terms along with its offer. The contract must reflect the original offer made from start. Capacity This is the total completion of accepting the terms of the contract from both parties without having any legal restrictions or any other discrepancies in doing so. Consideration This is the exchange of some goods or services that is a part of the contractual agreement by both parties. Privity to Contract This is a preventative element whereas it acts as a security to state that only the [parties involve in the contract is liable to sue each other if a breach of contract should occur. This means that no third party can be involved in the contract for lawsuits or make any claims other than the two parties involved in the contract. 1.2 Discuss the impact of different types of contracts There are several types of contracts namely:  Bilateral & Unilateral  Expressed & Implied  Valid & Enforceable  Voidable & Void  Executed & Executory Contracts come in the form of verbal, written, face to face. Each of these forms has their respectable impacts. When performing a contract face to face it i... ... middle of paper ... ...sidered to be legit and trusting. Contracts can be written, verbal and face to face; these contracts have terms and conditions that are very important and if breached are accompanied by different consequences whether serious or trivial. Neglecting contracts and agreements can cause serious injury to someone’s property, reputation or livelihood. In a business format vicarious liability happens all the time where an employee defaces a company via tampering with their products or establishing misconduct under the company name and brand outside of the company’s presence (company property). Laws play a very integral role in contracts as it is through this medium that justice can be served with reason and understanding from the law requirements of this country. There are different types of contracts for different types of situations and agreements.

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