CONTRACT NEGLIGENCE

Aspects of Contract Negligence for Business

Aspects of Contract Negligence for Business

Task 1

The creation of a binding contract that the courts will enforce requires the contracting parties to meet a number of requirements that are prescribed by the law of contract(Austen-Baker, 2012, pp. 191-196). While these requirements are not numerous, they must, nevertheless, be met before the agreement creates rights and duties that may be enforceable at law. These requirements are referred to as the elements of a valid contract and consist of the following:

1. An intention to create a legal relationship

2. Offer

3. Acceptance

4. Consideration

5. Capacity to contract

6. Legality

In addition to the six basic elements, certain types of contracts must be in writing, in an electronic substitute, or take on a special form, to be enforceable. But in general, all contracts must have these six elements present to be valid and binding. In this chapter, the six elements are examined, in order to identify the rules applicable to the establishment of these requirements for a contract.

Contracts are used in today's world as a major part of interaction between individuals or companies and consumers. (Fruehwald, 2012, pp. 149-151) Contracts are often used within our professional and personal lives; they allow business and individuals the ability to sell, purchase, or transfer services, property, and other rights (AIU Online, 2011). Such as the selling or purchasing of a vehicle or home, marriage or divorce, a conglomerate employs another firm or agency to perform a job for them like adverting for example. When determining the legitimacy of a contract, one should ask was an offer made, was the offer worth considering or considered, and was it accepted?

There are four elements to a valid contract, the first is called an agreement this is where an offer is made. An agreement is usually made between at least two parties. These parties can be a company and one person, two companies, or two people. The second is consideration this is where both parties consider to do or refrain from doing some form of lawful act. It is also the exchange of money between the two entities within the agreement for service or goods. As many know in the business world there are other methods of consideration. The third is lawful object this means that the parties must be legally capable of entering into a contract. 1. At least two separate parties entering into an agreement: The agreement can be between two people, or one person and a company or between two companies.

2. The parties are qualified to agree to the terms and conditions in the contract: The parties must be of legal age and have an understanding of what the contract is and details it outlines.

3. Both parties are receiving consideration or value from the agreement: This is most commonly money in exchange for a good or service, but there are other methods of consideration, especially in the business arena.

4. The contract is created for legal activities: Contract are not binding or ...