Apply The Elements Of Contract In Given Business
For a business, it is essential to understand the ways of applying the laws, principles and norms of the contract in the right way. Contracts are a valid conformity between one or more than one parties that is enforcing by the law. A contract is very essential in order to execute any businesses. In this project report, the basic contract areas will be discussed which should be taken consideration by any businessman. The significance of a contract would be analysed in this paper. It could be studied about the elements in both contracts and torts.
Task 1 Understand the essential elements of a valid contract in a business context
1.1 Explain the importance of the essential elements required for the formation of a valid contract
There are various elements available that make a contract valid and on the basis of case study Mr. William wants their employees to learn the essential elements that could make a contract valid.
Offer and Acceptance – offer is the primary step to start a deal or a contract and an offer must be lawful and if the other party accept the offer with its terms and condition then that offer is considered as the agreement and agreement of both parties makes a valid contract.
Consideration – to make a contract valid it is important to have a lawful consideration. Consideration is the value which is being paid or exchange in term of any products or services on that basis a legal contract could be initiated. Consideration is being given by the one party to another party in the monetary and non monetary form which is decided by both parties communally. [Vettori (2007)]
Capacity of the party – all the parties who are involving into the contract must be capable to make a lawful relationship with one another. All the parties must be legally, mentally and physically capable to enter into the contract.
Consent must be free – in a contract consent of both the parties must be free as it should be made without any coercion or forceful act. All the parties those are entering into the contract must be agreed in a same manner and on the same thing. Consent of the parties must not be created by some of these activities fraud, undue influences, coercion, etc.
Lawful object – an agreement or the object of a contract must be valid for making a contract acceptable. Object is not the same thing like consideration it explain the agreement purpose and that must be valid. An agreement would be valid if it is not involved by any fraudulent activity, is not forbidden by the law, includes any injury or harm, etc. For instance, Ali rent a villa which is used for the purpose of gambling so this contract is not valid in the sight of law. [Giliker (2010)]