Premium Essay

Valid Contract

In: Business and Management

Submitted By AliceChiu
Words 299
Pages 2
Valid Contract 1. Offer and Acceptance. In order to create a valid contract, there must be a 'lawful offer' by one party and 'lawful acceptance' of the same by the other party.

2. Intention to Create Legal Relationship. In case, there is no such intention on the part of parties, there is no contract. Agreements of social or domestic nature do not contemplate legal relations.

3. Lawful Consideration:Consideration has been defined in various ways. According to Blackstone,"Consideration is recompense given by the party contracting to another." In other words of Pollock, "Consideration is the price for which the promise of the another is brought."consideration is known as quid pro-quo or something in return.

4. Capacity of parties.The parties to an agreement must be competent t contract. If either of the parties does not have the capacity to contract, the contract is not valid.According the following persons are incompetent to contract.

5.Free Consent.'Consent' means the parties must have agreed upon the same thing in the same sense. (1) Coercion, (2) Undue influence (3) Fraud (4) Mis-representation (5) Mistake. An agreement should be made by the free consent of the parties.

6.Lawful Object .The object of an agreement must be valid. Object has nothing to do with consideration. It means the purpose or design of the contract.

7.Possibility of Performance. If the act is impossible in itself, physically or legally, if cannot be enforced at law.

8. Not Declared to be void or Illegal. The agreement though satisfying all the conditions for a valid contract must not have been expressly declared void by any law in force in the country.

9. Legal Formalities. An oral Contract is a perfectly valid contract, expect in those cases where writing, registration…...

Similar Documents

Premium Essay

Business Law on Luxury Goods - Contract Void or Valid?

...Audi R8, worth RM 900,000. The car has now been delivered but she is unable to pay for it. Discuss. First of all, the Law of Contract has been defined as an agreement which is legally binding between the both of parties. A contract simply means an agreement between the parties however the agreement has some important element within as it alone does not stand to have a binding contract. In a contract, there should have all the elements as proposed which will be offer, acceptance of offer, consideration, intentions to create legal relations, capacity, consent, legality and possibility of performance. In this particular situation, the element of capacity is lacking in this contract. Capacity to a contract defines us that parties in a contract must have the capacity to make a contract. In a simpler way, capacity is referred as legal ability to enter into a contract and the law generally states that everyone has the capacity to a contract except for certain circumstances which will be discussed in the following paragraph. Phing is 17 and underage, which makes her legally ‘incapable of capacity’ due to her minor status, and therefore any contracts made by Phing would be void ab initio except for certain exceptions, such as contracts for necessaries, scholarship contracts and insurance contracts. Section 11 of the Contracts Act 1950 is about contracts entered into by those who have no capacity. This section states that a person must satisfy the age of majority according......

Words: 842 - Pages: 4

Premium Essay

Essentials of a Valid Contract

...Essentials of a valid contract. A contract is an agreement that can be enforceable by law. An agreement is an offer and its acceptance. An agreement which can be enforceable by law must have some essential elements. According to the constitution,All agreements are contracts if they are made by the free consent of the parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. A contract must have the following elements. 1. Intention to create legal relationship. 2. Lawful object 3. Agreement not expressly declared void 4. Proper offer and it s acceptance 5. Free Consent 6. Capacity of parties to contract 7. Certainty of meaning. 8. Possibility of performance. 9. Lawful consideration 10. Legal formalities Intention to create legal relationship: The parties entering into a contract must have an intention to create a legal relationship. If there is no intention to create a legal relationship, that agreement cannot be treated as a valid contract. Generally there is no intention to create a legal relationship in social and domestic agreements. Invitation for lunch does not create a legal relationship. Certain agreements and obligation between father and daughter, mother and son and husband and wife does not create a legal relationship. An agreement wherein it is clearly mentioned that "This agreement is not intended to create formal or legal agreement and......

Words: 1288 - Pages: 6

Premium Essay

Essential Elements of Valid Contract

...Essential Elements for Valid Contracts By: M.H.M.Rishardh MBA, BBA (Hons), FCMI (UK), MCIM (UK), Member of AMA (USA). MSLIM, MIM (SL) BCAS Qatar Learning Outcome: On successful completion of this topic you must be able to * Understand the essential elements of a valid contract in Business Context Contracts that meet all legal requirements are valid and enforceable, which means that either party can hold the other party responsible for his or her agreement. 1. Offer and Acceptance To have a valid contract, there must be a meeting of the minds (mutual assent), nominally evidenced by an offer and acceptance. An offer is made by an offeror and expresses that person's willingness to enter into a particular agreement. The offeree is the person to whom the offer is made. When the offer is accepted by the offeree, a contract is formed. Unless the offer specifies a particular period of time for acceptance, it is considered to be held open for acceptance for a reasonable time. A newspaper on online advertisement usually is not regarded as an offer but merely an invitation to negotiate. If an offer states a time for acceptance but fails to indicate "time is of the essence," the courts could allow acceptance after the period for acceptance expires. If “time is of the essence” is stated in the offer, acceptance must generally occur within the period specified or the offer is canceled automatically. If the offer fails to specify the form for acceptance (letter,......

Words: 1130 - Pages: 5

Premium Essay

Contracts

...Different kinds of Legal Contracts Teneisha Bonner BUSN150-1303A-03/Professor Smith August 11th, 2013 Abstract One of the main attributes of an advanced community is the legal obligation contract, which permits individuals to make promises with one another knowing that they have legal options in the circumstance of a violation of the deal. Contract regulation in the United States is based on common law and it sometimes varies by other states and even with federal circuits. In this paper, different legal contracts will be discussed. Different Kinds of Legal Contracts A contract can be either an express agreement or an implied agreement. An express contract is one in which the words are being pronounced verbally, either orally or in writing. An implied contract is one in which some of the words are not being pronounced in terms. An implied contract can either be understood in fact or understood in regulations. An agreement which is mentioned in fact is one in which the situations imply that both individuals have made a deal even though they both have not done so expressly. For instance, when an individual goes to the doctor for his/her yearly physical, he/she always comply that they will pay an affordable price for the labor. If he/she does not want to pay for the service after the physical, then he/she has broken the contract that has been implied in fact. When an express contract is being implied, both parties have to decide whether if the terms are being...

Words: 705 - Pages: 3

Premium Essay

Understand the Essential Elements of a Valid Contract in a Business Context

...the law of contract, with a particular emphasis on the formation and operation of business contracts. You are encouraged to explore the content of these agreements and then develop skills relating to the practical application of business contracts, including offer, acceptance, intention, consideration and capacity. As a newly appointed human resources officer for an organisation called SimoSito (a software development company), your line manager has asked you to prepare a report with supportive examples of contacts for the organisation covering different types of contracts that the organisation can use or adopt. You will produce an individual written report for this assignment. The report should be approximately 2000 words and presented in formal report style. Assessment 1: ELEMENTS OF A VALID CONTRACT IN A BUSINESS CONTEXT Assessment Period: 6 weeks Learning Outcome: LO1 Understand the essential elements of a valid contract in a business context Assessment Criteria 1.1 explain the importance of the essential elements required for the formation of a valid contract 1.2 discuss the impact of different types of contract 1.3 analyse terms in contracts with reference to their meaning and effect TASK BRIEF Task 1: This task addresses LO1- 1.1/1.2/1.3 Produce a report that can be used to explore the types of business contracts, their terms, their meaning, their effects, and their impacts on a business. Support your report with examples of such......

Words: 308 - Pages: 2

Premium Essay

Contracts

...explaining the essential elements of a contract and the applicable remedies in the event of a breach What is required for a valid offer? How can one accept an offer? What is the concept of consideration and what form(s) can consideration take in creating a contract? What factors must be considered in assessing the legal sufficiency of an offer, acceptance, and consideration in determining whether a contract is enforceable? In the event that a contract is formed and subsequently broken, what remedies are available to the non-breaching party under your state's law? explaining the essential elements of a contract and the applicable remedies in the event of a breach What are the 4 requirements of a valid contract? 1. Agreement 2. Consideration 3. Contractual Capacity 4. Legality What are the 3 elements that are necessary for an offer to be effective? 1. The offeror must have a serious intention to become bound by the offer 2. The terms of the offer must be reasonably certain or definite, so that the parties and the court can ascertain the terms of the contract 3. The offer must be communicated to the offeree What is an offer? a promise or commitment to do or refrain from doing some specified action in the future. What are the 3 exceptions to the consideration requirement? 1. Promises that induce detrimental reliance, under the doctrine of promissory estoppel 2. Promises to pay debts that are barred by a statute of limitations 3. Promises to make......

Words: 1505 - Pages: 7

Premium Essay

Contracts

...following through with their agreement? Is the contract irrelevant because it was not reduced to UCC Statute of Frauds? According to Section 2 of the UCC Statute of Frauds, Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing. In reference to the above paragraph, a contract for the purchase of 100 watches was drafted by Randy Rolek and sent to Wally of “Windy City Watches,” In which Wally signed making the contract complete. Wally states that he should not be held accountable, but UCC Statute of Frauds states specifically, “$500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker.” Considering that the contract signed was for the purchase of 100 watches at $25 per watch, this puts the total due at $2500, making the contract valid. In conclusion, it is evident......

Words: 370 - Pages: 2

Premium Essay

Contracts

...CONTRACTS Stages in the life of a contract: 1. Preparation/Generation 2. Perfection/Birth 3. Consummation/Death Characteristics of Contracts: (ROMA) 1. Relativity (Art. 1311) 2. Obligatoriness & Consensuality (Art. 1315) 3. Mutuality (Art. 1308) 4. Autonomy (Art. 1306) Stipulation pour Autrui - stipulation in favor of a 3rd party. Requisites: 1. The stipulation must be part, not whole of the contract; 2. the contracting parties must have clearly and deliberately conferred a favor upon a 3rd person; 3. the 3rd person must have communicate his acceptance; 4. neither of the contracting parties bears the legal representation of the 3rd party. General Rule: Contracts (except real contracts) are perfected from the moment there is a manifestation of concurrence between the offer and the acceptance regarding the object and the cause. Except: Acceptance by letter or telegram which does not bind the offerror except from the time it came to his knowledge. Theories applied to perfection of contracts: 1. Manifestation theory - the contract is perfected from the moment the acceptance is declared or made; 2. Expedition theory - the contract is perfected from the moment the offeree transmits the notification of acceptance to the offerror; 3. Reception theory - the contract is perfected from the moment that the notification of acceptance is in the hands of the offerror; 4. Cognition theory - the contract is perfected from the moment the acceptance comes......

Words: 5188 - Pages: 21

Premium Essay

Contracts

...Michael has already sold the equipment to his junior partner. Consider Michael’s potential liability towards Laurel and the remedies that she might pursue against him Under English law a contract is defined as “an agreement made between two or more parties which is legally binding on them”. Jones, L., p.87. For a contract to be binding it must contain the elements of agreement, consideration, intention to create legal relations, compliance and the capacity to contract. A contract can be made verbally, by conduct or in writing. Contracts may also be bilateral or unilateral in nature. Agreement means there is a valid offer and acceptance. This means one party offers a service or commodity in exchange for some value and the other party accepts this offer. It must be clear who is making the offer and who is accepting the offer and the terms of the agreement. Acceptance “is the unconditional agreement to all the terms of the offer”. Jones,L.p.105. Consideration is a promise to do something in exchange for something else.Simply put it is giving something for something else. An everyday example of this is purchases where goods are exchanged for money. No contract exists if there is a promise with no return of a similar promise or exchange of value as seen in the case of Price v Easton (1833). The exception to this rule is where there is a signed document intended to be executed as a will. A promise to......

Words: 1814 - Pages: 8

Premium Essay

Valid Contract

...Course: Name Valid Contract Yours Name Professor’s Name [optional] University Elements for a Valid Contract to exist A valid contract does not need to be legally valid, it can be written in simple English and fulfill the needs of all the parties involved in that contract. Although, a contract may not be legal but it should be a written contract so that future issues can be settled on the basis of the written agreement signed by the parties (Rousseau, 1993). For a contract to be legally valid, it is necessary that all the parties that are in contract must be in agreement, i.e. one of the parties should offer and the other should accept the offer. Secondly, there must be exchange of some value, like, goods and services, cash or something else, or a promise that such exchange will occur between the parties (Rousseau, 1993). The following are the elements of a valid contract: Offer and Acceptance: There must be an agreement between the parties involved in the contract. As a basic rule for a contract, one party should make offer and another should accept the offer to make the offer valid. This can be done both written or orally (Rousseau, 1993). Define time for acceptance: The offer must be made with a valid deadline and there must be a time limit within which the offer should be accepted. Offers with no deadline may lead to uncertainty as sometimes the party who offered may like to withdraw the offer or the party showing acceptance may delay a lot. Give the......

Words: 1010 - Pages: 5

Premium Essay

Contract

...Betty v. Art Issue: Was there a valid contract between Betty and Art? Formation For there to be a contract, there must be an offer, acceptance and consideration. Offer Issue: Whether there was a valid offer between Betty and Art? Under the restatement §24, an offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his/her assent to that bargain is invited and will conclude it. In determining whether there is a valid offer, courts apply objective test which applies the reasonable person standard. Betty asked Art “on what terms he would build a barn on her property”, which created a manifestation of willingness to enter into a bargain with Art. The facts also show that Art responded what was needed to build a barn , “$100 per square foot, and Betty agreed with the terms "OK, if you guarantee January 1, 2005 completion”. Those exchange of statements provides a clear manifestation of willingness to enter into a bargain, where her assent to that bargain is invited and will conclude it. Art can argue that the exchange was more of an informational exchange of words and an invitation to enter into an agreement instead of an actual offer. When he stated that he had never built a bar for hire and continued to discuss what he would charge Betty, one could argue that the figures being discussed were all hypothetical. To Art’s defense, he stated that he has never build a bar for hire, which...

Words: 1442 - Pages: 6

Premium Essay

M1- Analyse the Impact of the Requirements for a Valid Contract in a Given Situation

...WITHDRAW OFFER -ESP APR 7TH APR 6TH ESP ------ ACCEPTANCE - TGL APR 8TH Description of Diagram… APR 1ST TGL offer to sell furniture to ESP for £5000, of which the letter contained a term which was to notify TGL of acceptance within 7days. On APR 5TH sell products to another company, later that day they send a letter revoking the original offer, the letter was received on the APR 7TH . Therefore the offer is open until the 7th. On APR 6TH ESP post a letter accepting the original offer, which was received on the APR 8TH. TGL state that there is no agreement to sell but ESP threatens to sue, due to breach of contract. ATG win this case due to the term they put in, demonstrated by the astarix. If the general rule is applied then the offer is accepted on the 6th however the general rule won’t apply and the acceptance is complete on the 8th, the offer too late, and the contract is ‘dead’ Scenario 2 ATG-- Jim Special offer £2000 This is the offer This is the offer Jim -go away and think about it ---ATG ATG-Jim offer to sell for £2000 This is a counter offer This is a counter offer Jim -ATG emails back saying yeah for £1950 Description of Diagram … ATG offer to sell the product as a reduced price of £2000, Jim goes away and thinks about the deal. ATG then send an email to Jim saying they will sell the product to him for £2000, Jim writes back saying yes, if it is £1950. Jim attempts to accept the original offer, he is responding to an invitation to......

Words: 326 - Pages: 2

Premium Essay

Contract

...minor the agreement is not valid. As the bike is not necessary, Simon cannot be bound. Simon is not liable to pay. B) Assuming that the agreement is binding, Simon would then be in breach of contract as he has not fulfilling this end of the contact, however keeping his age in mind and that the bike is not a necessary Simon would not be liable to pay. Case – Nash v Inham 2. Giving that Les is up to date with his payments and has complied with all parts of the policy then the Xexon Ltd would need to provide written explanation as to why they are refusing to pay failure to provide a written explanation would be a breach of contract as insurers have the duty of good faith to their policyholders. If that was the case Beth and Les would have grounds to seek compensation. Beth and Les would need to call one of the complaint lines, under Australian law an insurance company should have two in place. One would be internal and the other would be an external. The insurer would need to pay interest on any payment which has been delayed under the Insurance Contracts Act 3. A) As no exchange of contract has happened, Lucy can withdraw the offer to sell and accept another offer Lucy will have to refund Demi. In saying this Lucy did show clear intent that she wishes to be legally bound with Demi. B) If Demi did move in prior to settlement she still not the owner so she would not be able to start to renovate unless it was apart of the contract. Moving in prior to......

Words: 314 - Pages: 2

Premium Essay

Contracts

...Phillippa Webb 11/20/15 A contract is a legally binding agreement between competent parties and can be written, spoken or implied. A contract is valid and enforceable when the following things exist, an offer, the acceptance of the offer, it must be legal, consideration and it must be fair for all involved. Contracts can be written, verbally or even implied, however the best type of contract is written. Ever heard the saying get it in writing, that is because when things are in writing they are more believable than hearsay or assumption. Although written contracts are good, an implied contract is also good because a person’s actions can determine the validity of the contract. When parties enter into a contract they are obligated to perform certain duties The parties to a contract must either perform, or offer to perform, their respective promises, unless such performance is dispensed with or excused under the provisions of this Act, or of any other law.Promises bind the representatives of the promisor in case of the death of such promisors before performance, unless a contrary intention appears from the contract. | The  promises made by the parties define the rights and obligations of the parties. The contract allows parties to define their relationship, it is the means of structuring  relationships . The fudamental principe of the binding nature of contracts (pacta sunt servanda) requires that the agreement be made at arm's length.  Contract law is sometimes......

Words: 327 - Pages: 2

Premium Essay

Contracts

...1. Invitation to Treat v. Offer to the World at Large A contract may be defined as ‘a promise or set of promises which the law will enforce’ or as ‘an agreement giving rise to obligations which are enforced or recognized by law’ . An ‘offer’ is an expression of willingness to contract made with the intention (actual or apparent) that it shall become binding on the person making it as soon as it is accepted by the person to whom it is addressed . An offer may be addressed either to an individual or to a specified group of persons or to the world at large; and it may be made expressly (by words) or by conduct. A communication by which a party is invited to make an offer is commonly called an ‘invitation to treat’. It is distinguishable from an offer primarily on the ground that it is not made with the intention that it shall become binding as soon as the person to whom it is addressed simply communicates his assent to its terms. A statement is clearly not an offer if it expressly provides that the person who makes it is not to be bound merely by the other party’s notification of assent but only when he himself has signed the document in which the statement is contained . Apart from this type of case, the wording of the statement is not conclusive: it may be an invitation to treat although it contains the word “offer” ; while a statement may be an offer although it is expressed as an “acceptance” , or although it requests the person to whom it is addressed to make an......

Words: 1484 - Pages: 6

隐私政策 | Along With the Gods - The Last 49 Days Legendado Ação / Drama / Fantasia 2018 1080p / 720p / Bluray / Full HD / HD Filmes Torrent | Phantom Investigators