Business Contract Assignment Help
LO 1.1 Explain the importance of the essential elements required for the formation of a valid contract
What is contract- when the two parties are entered into an agreement willfully and there is legal obligation is created between them is known as contract. The essential elements which are consider necessary for the formation of the valid contract.
These are under:
- offer and acceptance
- Legal capacity
- Consideration (lawhandbook.org.)
Offer and acceptance – First essential conditions for creating the valid contract there must be the offer and acceptance between the parties. If there is no offer and acceptance then the contract is not valid in the eyes of law. In offer and acceptance the party has need to make an offer to the one party and one party have to accept the offer for making the contract. (Kumar’s)
Consent- Second and one of the most important essential for the formation of the contract is the consent. The concept of the consent is come under the section 13. There should free consent of the parties. If the consent is not free then it is not valid contract. There must be no physical danger in the contract. There are some points which are mention below which shows the consent is free when:
- First is the coercion which is defined under section 15 of the contract act.
- There is no undue influence by the one party on another party and it comes under section 16.
- The consent is not taken by fraud. This connect is deal under the section 17
- If there is misrepresentation by one party in making of contract then consent is not free. It is defined under section 18.
- The sections 20, 21 and 22 deals with the mistake; it is also one of the important for the free consent. (sweetp999)
Legal capacity- The contract which is made by the parties must be in legal capacity means that the contract which is made by the parties is not against the any provisions of the law, thus example the contract which is against the law is that making the contract for commit the crime, or for the making fraud. The contract is come under the law; it is not beyond the law. (hkclic.org)
Intention– There must be an intention to create the contract between them. If the intention is taking by any influence then the contract is not the valid contract.
For instance: like husband and wife agreement. There is a social agreement between the husband and wife agreement and which are not enforceable by law and court considers the domestic arrangements: Balfour v. Balfour. (sweetp999)
Promise to pay Consideration: There should be promise between the parties in which they make the promise to pay the consideration. It is given by the promisor to promisee. When the promisor take the promise from the promisee that he has done or he is abstained from doing something in the past, he does or abstain from doing in future, or give promise not doing something in the future. The promise which is given by the promisee to promisor for such act the consideration is given. Any agreement which is not included any consideration is not an agreement.
Capacity – the capacity is also an essential element of the valid contract. The parties which are made an contract they are both competent for the valid contract. they have the capacity of contract, if they are not capable then contract is not valid. The person who are not competent for the valid contract are:
- If a person is minor
- Person is unsound mind
- Law disqualified any person (sweetp999)
LO 1.2 Discuss the impact of different types of contract
The impacts of different types of contract are:
- Unilateral contract: In this contract there are two parties, one party is known as offeror and other party is known as offeree. In this there one express promise is given by the one party from the another. It is differ from the bilateral contract, in which the mutual promise is given by the both the parties to one another. The offeror has to fulfill the contract, he is under the legal obligation because the offeree is act according to the offeror promise. The offeree cannot be enforced to act according the promise of the offeree , because there is no return promise is given to the offeror.
- Bilateral contract: bilateral contract is that contract in the mutual promises is given by the both parties to one another. The contract is arise when the promise is made by the offerors to the offeree in return of the promises which is made by the offeree.
- Special contract- special contract is also bilateral contract. The contract is signed by the both the parties and the copy of the written agreement are keep by the both parties.
- Simple contract: simple contract are those contract which is either in the form of written or in the form oral. The parties who make the simple contract are free to decide the form of contract in which they make.
- Verbal contract: the verbal contract is that contract which is made by the parties orally on the telephone and it is necessary that it must be well documented by the parties.
- Standard contract: the standard contract is that contract in which the document is maintain by the each representative party and signed by the party and it is sealed.
- Implied contracts : In this contracts the responsibilities is raised from the agreement and the agreement is implied contract that means it not expressed in written or any form of words.
- Express contract: express contract is that contract in which the terms and conditions are expressed clearly. This contract is signed by any:
- Organizations (shahriyar. N)
LO 1.3 Analyze terms in contracts with reference to their meaning and effect
Terms in contract: various statements will be made by the one party for inducing the party for entering in the contract. Thus the dispute is arises that what are the terms of contract, which statement should be considered as the part of the contract. The parties which are under the contract are bound by the terms of contract they are not bind by the statement.(lawhandbook.org)
The terms which are used in the contract are:
- Exclusion of responsibility terms.
Apart from these contracts include the various types of terms but these are the important terms
Conditions term: the conditions terms is one of the most important terms. The parties are not entering in the contract without the condition terms. If any person breach the condition and the condition which is make is false, then the contract will be treated on part of that is void and voidable.
Warranty contract: warranty is less important than the conditions term. The parties which make the condition false and make breach then the party have to pay the compensation for the damages which is suffered by the party on the wrong done by the party.
The court looks the merits of the case then court will consider the circumstances and decide that the term is condition or warranty.
Exclusion of responsibility terms: in the contract there is term which is known as exclusion of responsibility terms. In this term the party is excluded from the responsibility if in the contract there may be something going wrong. If the contracting parties signed the contract, they will be automatically bound by the exclusion clause.
LO 2.1 apply the elements of contract in given business scenarios
Business contract: A contract between the small owners is known as business contract. Business contract is used in a situation in which the specific duty has to be performed and any service which is providing by the payment of fee. It is also a legal agreement.
There are various element which are required for the legally validity. These are:
- Parties: Both the parties of the contract are necessary to enter in the contract and the parties in the contract are simply the entities. It is can be in the name of person or any separate entity of the business.
- Consideration: In contract the consideration is that what each party takes the profit from the business.
- Competent parties: The parties should be competent for the contract if one of the party is not competent for the contract then contract will be declared to be void. The factors which are considered to be competency that :
- Party should not be unsound.
- The consent is taken at the time when the party is under the influence of drugs then the contract will be void.
- The party is under the influence of drink then the consent is not valid then it will not treat as competent party
- Legal purpose: There should be a legal purpose in the business contract. If the contract is not for the legal purpose then the contract will be treated as void.
- Terms and conditions: The terms and conditions are laid down the rights and duties of the parties under the business contract.
LO 2.2 apply the law on terms in different contracts