CONTRACT AND NEGLIGENCE

Aspects of Contract and Negligence for Business



Aspects of Contract and Negligence for Business

Section 1

Contract

The study made by (A contract refers to a legal binding between two parties, in relation to a particular subject. It covers a wide range of matters including ownership of intellectual property, settlement of a dispute, terms of employment and sales of real property and goods (Ehsan ,2008,pp.1-2).

A contract is called valid contract when it follows all the essential elements. The law of contract comprises of set of rules that govern the relationship, validity and content of an agreement between two or more persons involving companies, individuals and other institutions related to the ownership, exchange of interest, provision of services and sales of goods.

The law of contract confirms the fundamentals foundations of any contract in despite of its complexity that it should contain to form the agreement which is law enforceable (Gillies P, 2004, pp.1-2). The essentials elements which make an agreement a valid contract are as follow:

Essential Elements of Contract

There are four basic essential elements of a contract which include offer, acceptance, intention of legal consequences and consideration (Frey, A. M. and Frey, H. P, 2001, pp.1-89 ).

Offer

In order to make a valid contract there must be the meetings of the mutual acceptance of the parties is necessary. There should be a clear cut offer stated within the agreement

(Mann, A. R. and Roberts, S. B., 2012, pp.1-94)

An offer does not encompass any ball park figures, proposal request, or letters stating specific objectives.

An offer may not remain valid:

When its acceptance time expires;

If the offer is taken back before its acceptance; or

After a realistic time in the conditions (in general, the offer will have long life if the value of the contract is higher).

Acceptance

If the offer is a valid, its acceptance would also be valid. This specifies that the offer needs to be accepted that way it is without modifying any conditions. A counter offer is formed if new terms and conditions are suggested. This offer can be acknowledged or abandoned.

There can be numerous offers and counter offers before an agreement is made. It is not significant that who has made the final offer, but the acceptance of offer is important as it brings the negotiations to an end by specifying all terms and conditions of the contract. Acceptance can be either done verbally or in writing (Manuel, M. K., 2011, pp.1-24,)

Intention of Legal Consequences

The main requirement of a contract is that the parties aim to enter into a legally bound agreement. This specifies that the parties, which have formed the contract, should have legal relations with one another.

The intention to formulate legal relations is recognized, so the contract does not specifically state that legal consequences will follow. If all parties, which have entered into a contract, make a decision that they should not be legally bound, this should be highlighted in the contract.

Capacity

A major element for a non-compete contract to be valid is the legality of ...