ASPECTS OF CONTRACT AND NEGLIGENCE FOR BUSINESS

Aspects of Contract and Negligence for Business

Aspects of Contract and Negligence for Business

Task 1

Importance of essential elements required for formation of valid contract

The essential elements for the formation of a valid contract include: offer and acceptance, intention to create the legal relations, consideration, capacity and the privity of contract. It is eminent to note that these elements are applicable in all the forms and types of legal agreements, including both the business and non-business agreements.

Offer and acceptance implies that offer is made by one of the parties and is accepted by the other, while the intention of creation of legal contract implies that there is willingness from both the sides to enter the legal agreement. Similarly, consideration highlights the fact that there is some sort of exchange involved in the agreement, either of goods or of services, that has to be carried out by the parties (Giliker, 2010, Pp: 213). Capacity is determined by the fact that both the parties are in a position to enter the legal agreement and there are no legal implications that restrict them from doing so, and similarly, privity of contract prevents imposition of rights or impositions on any individual or party apart from the parties involved. Thus, privity of contract ensures that only the involved parties are able to sue or claim each other, with no other party having the right to do so.

Use of different forms of contract and their relevance to different situations

The different forms of contract include face to face (written) and distance selling (impact contracts), and the situation and circumstances decide which type of contract would be formed. Generally, face to face contracts are formed when both the parties are present in the same area and can meet to discuss facts and figures (Miller and Jentz, 2009, Pp: 152). As the parties can get in touch with each other in this case, they enter the written form of contract in which all the clauses and conditions are written and signed by both the parties. It is eminent to mention here that the same situation does not apply to other parties that are in different locations and usually entre distance selling contracts. In case of distance selling, the parties do not get a chance to meet in-person or to inspect good, and thus the contracts are formed on the basis of trust and faith. The contract is mainly based on the impact and thus the same is also accesses and analyzed on the basis of impact placed by it.

Terms in contract: meaning and effect

The major terms included in the contract include: condition, which highlights the actual situation and condition involve in the contract and the manner in which it would be executed. Warranty is the condition that allows the wronged party to claim for damages and get the money back, thus providing assurance to one party, by the other. Innominate terms are the ones that cannot be classified under any particular law and thus ...