LEGAL ISSUES

Aspects of Contract and Negligence for Business

Aspects of Contract and Negligence for Business

Task1

The task one involves the discussion about the essential elements of a valid and legal contract, types of contract with their impact and the explanation of different legal terms that are considered to be important in a contract. All agreements are contracted; however, all contracts are not agreement, and there is a proper line of distinction between the two terms.

Elements of a valid contract

The legal definition of a contract states that it is the agreement between two or more parties or partners that are enforced by law such as an insurance policy (www.insuranceclasses.net). The common elements that are combined to form valid contracts are as follows (Macsain, 2012, p.1):

Offer and Acceptance

A valid contract is enforceable by law that starts with the process of offer and acceptance between the two competent parties. An offer must be made by one party to the other party and it would lead to the formation of contract only if, accepted by the other party. For instance, I make an offer to a person that I will sell my bike to him and if he accepts the proposal made by me then it would become a valid agreement between the two parties which is one of the basic elements of a valid contract (www.insuranceclasses.net).

Consideration

A lawful consideration comes with the lawful object. Consideration is an essential element of the contract that is the cause of the promise, and it might occur as the result of the promise made in the return of promise. Consideration for a promised is formed when the promisee or the third party abstains from doing or have abstained from doing something at the desire of the promisor (Rao, 2008, p. n.d.).

Capacity of Parties

A person is competent to enter into a contract if he is of the age of maturity in the eyes of the law he is subject to which, and he is allowed to do a contract if he has sound mind and do not disqualify from contracting by any other law to which he may subject (Rao, 2008, p. n.d.).

Consent

A valid contract essentially requires the free consent of the both parties involved in the contract. It is the requisite of a valid contract that both parties agree upon the same thing in the same sense. For a valid contract, the mere consent of the two or more parties is not enough and the parties involved must show their free consent must not be made to consent by means of coercion, fraud, mistake or misrepresentation.

Agreement must not be Void

An agreement could not expressly be declared void unless it is not enforceable by the law. An agreement would be declared void if it has a legal sanction and it might give rise to the rights and obligations (Rao, 2008, p. n.d.).

Registration and Documentation

An oral contract is considered to be a valid contract; however, the proper writing and registration of the contract must be done if the law ...