I will also discuss the impact of the contracts in a business and how the true propose of contracts. I will show what is needed in a contract to be legally enforceable. I will discuss how a contract must contain the following six elements: an offer and acceptances, a mutual agreement, a consideration, a competent parties, and legality of purpose, and proper form. All of this will be discussed in depth in the following paper.
Busses Business Law I By wallpapered Even though the operation of contracts, business law show how contracts may be classified in several ways depending on the manner in which they are created, expressed, or performed. These includes: either oral or written; it may be express or implied; and it may be formal or simple. A contract is a legally enforceable agreement that is created when two or more people agree to perform or to avoid performing certain acts that they have a legal right to do and that meet certain legal requirements (Luzon, 2013).
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An example of a contract exists between an assistant and the manger. That contact can be extended once the assistant becomes a partner and so forth. Contracts can be extended or changed as needed to reflect the contractual relationship. To be a legally enforceable contract, it must contain he following six elements: an offer and acceptances, a mutual agreement, a consideration, competent parties, and legality of purpose, and proper form (Luzon, 2013). Now if one of these elements is missing then the court will refuse to enforce the contract.
The impacts of contracts in everyday operation of a business are very important and it is done through analyzing identifying all the legal issue and elements of a contract. Offer and Acceptance is the most important feature of a contract is that one party makes an offer and for an arrangement to be reached that the other party accepts (Luzon, 2013). After a valid offer has been made the two parties should ask to enter a defined contractual agreement (Contract Law, 2001). To make sure an offer of the house price is clear and definite; the price needs to be clearly communicated to the offered.
Offers can be made to individuals or to the general public, such as advertising (Contract Law, 2001). After the offer has been made, then negotiations between the two parties can begin conducting personally through an agent. In the process of buying a house it’s usually through and agent Mutual agreement is where the parties of a contract must (Contract Law, 2001). Mom to a mutual agreement (Luzon, 2013). A good example would be when one buys a home through a mutual agreement, which is when two parties come to an agreement on the worth of the home.
Both parties must understand the agreement, and make sure no misunderstanding or mistakes exist between the two parties (Contract Law, 2001). The contract must show that a mutual agreement has been made, referred to as the meeting of the minds (Luzon, 2013). An exchange of consideration must be included in any valid contract (Luzon, 2013). Between the parties, something of real value must be exchanged, whether it can be cash, tangible objects, the performance of an act, an agreement to refrain from performance of an act that the party has the right to perform or a promise of future consideration (Larson, 2010).
The difference between the exchange of consideration and a unilateral promise is that a promise to do something without an exchange of consideration is not an enforceable contract (Larson, 2010). For example, if Joe tells Jack that he will buy the house for a certain amount then Joe has made a promise to exchange for the house, a consideration has been exchanged. The parties to a contract must be competent, that is, be capable of understanding what they are owing (Larson, 2010). They must be of legal age and normal mentality.
The functioning of a party’s mind must not be impaired by injury, mental disease, or the influence of drugs or alcohol (Luzon, 2013). To the case at hand both parties that are involved in the purchase of the home must be of legal age and not impaired in any way in order for this contract to be valid. Let us examine specifically who are competent to contract and who are not. According to section 3 of the Indian Majority Act 1875 a minor domiciled in India is one who has to complete his eighteen years of age (Raw, 2008).
In cases where a guardian of the minor’s person or property (or both) is appointed or where a minor’s property is taken over by a Court of Wards, the minority continues up to the completion of his age of twenty one years. Age of majority is to be determined by the law which the minor is subject. A minor is not The intent of the contract must not violate competent to contract (Raw, 2008). The law (Bays, 1920). The courts will not enforce a contract to do something that violates the law (Luzon, 2013).
If the information or the performance of a contract is illegal, resulting in a crime and/or tort, or opposing public policy or interest, the interact is usually considered void (Barnett, 2003). An example of this would be if the contract involves purchasing a stolen item, an illegal drug, involves fraud or harming someone. In my example, of the purchases of the home if the seller sold the home without revealing that it had toxic mold or that there was a second mortgage on the property’s they did not pay, this would cause the contract to be voided.
Contracts are illegal for two reasons: first, beaus their object is illegal; second, because though the object is perfectly legal, the manner of making them is against the law (Bays, 1920). Any agreement to violate the law and any agreement forbidden by law is void (Bays, 1920). Certain contracts, such as those involving the sale of personal property for $ 500. 00 or more, or those that cannot be fulfilled within a year, must be in writing to be enforceable (Barnett, 2003).
Other kinds of contract are not only in writhing but must also follow a prescribed form, such as containing the signatures of the parties, these are known as paper form (Luzon, 2013). When purchasing a home the contract must be in writing and needs to have many forms that need to between the seller and buyer and between buyer and elders. There are many forms that need to sign during a sale of property as big as a house (Larson, These essential elements are necessary in an agreement in order for it to 2010). Be legally enforceable. There is a breach of contract when a party fails to perform the stated obligation in a contract (Raw, 2008).
The injured party has several recourses when it comes to the breach of contract. The injured party may rescind the contract or release the other party from the obligations stated in the contract, or more likely, the parties may agree on innovation (Raw, 2008). Any of these three solutions may be enacted without litigation, this can only be determined if one knows the type of contract is being used. There are different kinds of contracts. Agreements and contracts are two different things. A contract is an exchange of promises between two or more parties to do something and a legally binding agreement that is enforceable in a court of law.
An agreement is reached when an contract and the contract must not be trifling, indeterminate, impossible or illegal (Booker, 2003). A breach of contract is recognized by the law, however remedies can be provided. Contracts can be classified in several ways depending on the manner in which they are created, expressed, or performed. These includes: either oral or written, it may be expressed or implied, may be formal, simple, and it may be entire or divisible (Booker, 2003). Oral contracts, as the name implies, are contracts that are not reduced to writing, but are valid contracts nonetheless (Luzon, 2013).
Technically, any oral agreement between two parties can constitute a binding legal contract. In daily life, most contracts can be and are made orally, such as parching a book or a sandwich. Most contracts within business are based on conversations, on the phones and at the desk that are enforceable contracts. Basically at a real contract created entirely of conversations between two parties. By making the decision to make a purchase with a salesperson, pays cash for it, then takes the item with them; they are making an oral contract. Each of these simple transactions contains all the elements of a contract (Luzon, 2013).
While oral agreements can be used, most businesses use formal written contracts when engaging in operations. Written contracts provide individuals and businesses with a gal document saying the expectations of both parties and how negative situations will be resolved (Raw, 2008). Sometimes written contracts are required by either the parties, or by statutory law within various Jurisdictions for certain types of agreement (Larson, 2010). An example is when one is buying a house or land. In business, written contracts are the ounce of prevention that helps reduce costly disputes (Luzon, 2013).
Written contracts can appear in many forms, such as; informal documents, invoices front/back, letters, or even proposals. A carefully drafted written contract spells out your entire deal with your clients. This prevents clients from unilaterally changing the arrangement at a later date and at your expense. It is important to know how to structure a written contract. To have the contract in the right structure you must have it in a written form and have an offer on it. Make sure that the terms of the contract is simple and clear as possible so there is no mistake in the service you will be providing.
Include a imagination section if necessary. When structuring a written contract, it may or may not require a negotiation section. To negotiate terms in a contract you must to state anything clearly in the writing (Luzon, 2013). Structure an “rout clause” in the written contract to allow the other party to breach the terms of the contract legally in exchange for a fee paid to you. Have the written contract proofread to make sure that everything you needed to is covered and that the spelling, grammar, and punctuation is correct In the event of a dispute involving an oral contract, the parties (Barnett, 2003). Just depend on circumstances, or on the testimony of witnesses, to determine the rights of the parties. The problem is that these memories fade, and even witnesses cannot be relied on the recall exactly what was said. With a written contract, these particular problems are eliminated (Luzon, 2013). An executors contract is a legal contract characterized by obligations that have not yet been performed on the part of one or more parties to the contract (Smith, 2012). A simple example of an executors contract is a lease agreement. The landlord is required to provide a payments of rent (Smith, 2012).
If either party stops performing, it is a breach of contract and the other party may have grounds for a suit. In cases where both have unperformed obligations, breach by one party can allow the other party to breach without penalty (Smith, 2012). Many contracts are executors in nature. Executors contracts take on special meaning during bankruptcy processing and it is in this context that people most frequently discuss these types of contracts. It is important for people declaring bankruptcy, as well as creditors, to understand how executors contracts are involved in bankruptcy proceedings (Smith, 2012).
For debtors who are not certain about their obligations, a bankruptcy lawyer or accountant can provide assistance (Smith, 2012). Implied contracts are a legally enforceable agreement that arises from conduct, from assumed intentions, from some allegations among the immediate parties, or from the application of the legal principle of equity (Smith, 2012). For example, a contract is implied when a party knowingly accepts a benefit from another party in circumstances where the benefit cannot be considered a gift (Smith, 2012).
Therefore, the party accepting the benefit is under a legal obligation to give fair value for the benefit received. Formal contracts known as a specially contract, is a written contract under seal (Bays, 1920). The seal on a formal contract may consist of simply with different things: A seal, a scroll, a wafer, or an impression on the paper are a few. Only a few contracts are formal contracts like bonds, montages and deeds covering title to real estate are required to have a seal (Bays, 1920).
However some states have stopped using seals Simple contracts are contracts that are not formal, whether it is (Luzon, 2013). Written, oral, or implied (Bays, 1920). A simple contract is an informal contract made without seal, even though the subject matter of the contract may be extremely complex and may involve huge amounts of money (Luzon, 2013). In conclusion the operation of contracts show how contracts may be classified in several ways either oral or written; it may be express or implied; it may be formal or simple; and it may be entire or divisible.