CONTRACT AND NEGLIGENCE

Aspects of Contract and Negligence for Business

Aspects of Contract and Negligence for Business

Part A: Task 1

Written and Verbal Contract

A contract can be made on the basis written or verbal/oral agreement; with the decision regarding nature of the instrument for agreement being dependent upon the legally competent two or more parties, who entered into the contract voluntarily. But the decision by the parties should be taken keeping in view that for the contract to be legally enforceable, the instrument should be in accordance with the Statue of Frauds. Statue of Frauds is a component of State Law which determines the purpose and the nature of contracts that are to be based on written agreements for them to be legally enforceable in the Court of Law. Thus, written contract pre-dominantly sums up the agreement between the parties which would be legally enforceable. Verbal Contract is although valid, it does not bring in legal enforceability. The agreement between the parties created with in the verbal contract is only based on words and thus no party can claim the damages or sue the other party should the contract is violated.

Deeds

Deeds are basically the Written Contract that is used in the Real Estate industry for the purpose of transferring either title or interest and the likes. Thus, all the deeds are written contracts undertaken to cover real estate agreements.

Importance

Businesses are fuelled by the contracts that take place every now and then between disparate companies and individuals. This registers significant impact on the growth of the economy as well. Free exchange is the element of the market that prompts interaction among various entities and the baseline of their interaction is created by voluntary agreements among them. For these agreements to be legally binding so as to minimise the risk associated with any transaction and relation; contract law is of significant value through which contracts are transformed into legally enforceable.

Elements of Legal Binding

The elements of legal binding are Mutual Consent, Offer and Acceptance, Mutual Consideration; which basically is the exchange of something of value, Delivery upon the agreement. For the contract to be mutually acceptable, it is imperative to have mutual understanding regarding what the contract is undertaken to cover. The offer made by one party should be derived from this mutual understanding and may revolve around numerous offers. A counter offer could be made by other party, under which circumstance; initial offer would be rejected. The acceptance of the offer forms the cornerstone of the legally binding contract and marks the completion of the contract. For the contract to be valid, it must deliver something of value to each party. This should be determined with careful consideration as the offer cannot be revoked if it is found that one party did not receive significant value for the exchange they undertook. Once the contract is undertaken, these consequences are to be borne by either party which is subjected to them. The contract is only enforceable in the Court of Law when the ...