Elements Required for the Formation of a Valid Contract

Elements Required for the Formation of a egressual Contr processIntroductionWhen we think of either signifier of business thither summates the necessity of taste and applying the regulatings, principles, norms, and usages of resolve. Now a day there is ex represently any business dealing that does non comes within the purview of contact. So its actually principal(prenominal) to founder a clear and definite psyche on the subject of narrow righteousness. b bely, in this paper Iv try to generate a glimpse on this subject along with its industry in practical day to day to business practices in versatile atomic number 18as. This piece of work allow demonstrate the very basic and original areas of get, like suggest and word message, shape etc, with a pull upional emphasis on the operation and operation of business contact. In addition, the paper tames importance of down the stairsstanding the principle of liability in scorn in business practices and make an effort to apply much(prenominal)(prenominal) principles and practices in diverse business s conduces. destiny 1Importance of the essential fractions required for the formation of a sensible urge onA make out is the pro quite a littleateness amongst parties regarding any kind of dealings that is enforceable in law. So an commensurateness between parties enforceable by law is a read and never the some some others which are not enforceable by law. Suppose, an transcription to purchase 1-kg heroine is not enforceable by law and as such(prenominal) it dissolvenot be a compact, provided an agreement for the purchase of computer is enforceable by law and as such is a fight. In this regard, we stack reach to a conclusion that al oneness contracts are agreements, plainly not the vice versa.A contract between the parties can be createdverb eachyin writing (including by electronic instrument and website)by act, be study, conduct or inference orBy means of twain or any of the above mentioned ways.Essentials Elements of a logical ContractTo be a contract, an agreement must(prenominal) fulfill the undermentioned conditionsProposal( continue) and acceptancethe parties must be competentthe take of parties must be freethere must select lawful con siderationthe aspiration must be lawful andthe agreement must not expressly declared void by law.Beside the above mentioned elements the contract must be true possible of consummation and written and registered if so required by law. as yet there can be special principles, price and conditions applicable to the contract as agreed by the parties that concern specific subject matters, such as employment contract, the cut-rate sale of moveable lieu, sale of immoveable property etc.The OfferOffer is the starting head dirt from where an agreement gets purport formally which ultimately may take the shape of a legally cover song contract.Offer means the formal expression of intention or forge tingness of one troupe to other to do or to refrain from doing an act in entrap to obtaining the assent of the other companionship to such act or omission. When one party signifies his willingness to other party in order to take fancy of that party regarding any dealing, the party expressing such willingness is verbalise to make an draw out and he is called the offerer and the person to whom it is make is called the offeree . So it is clear that,the offer must be communicated to the other partyit can be revoked at any time prior to acceptance.In this point we break to keep in mind that some kinds of transactions have a preliminary negotiation in which one party charm the other to make an offer. Such an stage is called invitation to political machinee for. Such primary negotiations are an way to reach a stage to make an offer. It is now tumefy settled that negotiations to enter into a contract can amount to an invitation to treat but not an offer.AcceptanceAn offer when accepted causes contract. When the person to whom an offer is made signifies his assent thereto the offer is said to be accepted. indeed the essence of the acceptance is the assent or consent that is coming from the offeree . It scarcely speaks of giving ones consent to the offer as it is made by the offeror and as such it will be a valid acceptance to convert an offer into a contract. So the acceptancemust be communicatedmust be to the original proposal made other sharp-witted it could be a counter offertakes yield on the basis of the order of communicating the acceptance to the offeror (in postal mode- on the date posted, in cocktail dress of instant or electronic mode, occurs when received).Competency of the PartiesThe law does not give eachone to enter into a contract quite a prescribe authoritative specific qualification to attain to be competent to enter into a contract. A person to be competent to enter into a contract, must be of the age of majorityof sound mind an dnot indispose from contracting by any law which he is subject. therefrom negatively, the succeeding(a) persons cannot enter into contractminorspersons of unsound mind andpersons disqualified by any law.Free ConsentFree consent is an essential element of a valid contract. It is natural that for an agreement all parties to it must come to a common point. There are mainly two requirements to be a consent that the consent must prone-To the same thing, andIn the same sense.So if the parties So to symbolize a contract even mere consent is not sufficient, rather the consent must be free consent concord to law agree upon diverse things or in different sense then this will not be interact as consent. The term thing used in the commencement requirement means the contents or subject matter of agreement.On the other hand, to constitute a valid contract even mere consent is not sufficient, rather the consent must be free consent according to law. That is to severalize, to be a free co nsent, that must not be caused by, coercion, overweening influence, fraud, misrepresentation and mistake. In other words, if consent is given being touch on by any of the above elements, the consent will not be treated by the law as free consent.Consideration ordinarily consideration means mean the exchange of the price. It has different legal meaning which does not restrict it only within the area of monetary earnings rather to be consideration, law required that, something is to be through with(p), forborne, or augurd at the desire of the offeror. It may even be termed as burden execute or in other sense sufferings in the sense of losing something, may be that is ones energy, service, gold or anything valuable.A paragraph from the book law of Contract (10thedn, Sweet and Maxwell,1999,at p.64) Professor Treitel is worth mentioning The traditional meaning of consideration concentrates on the requirement that something of value must be given and because states that What th e law is concentrate with is the consideration for a promise-not the consideration for a contract. So consideration is the cause of acceptance and it mustiness be valuable. Something must be supplied in return of the offer of the offeror, eg. Money.Must be lawful and non gratuitous.Must not be something already paid or incurred(past consideration)Lawful tendencyIn order to execute a valid contract the bearing and consideration of a agreement must have to be lawful. The aspiration and consideration are lawful unless-It is forbidden by law orIs of such reputation that, if permitted, it would defeat the provisions of any law orIs fraudulent orInvolves or implies injury to any person or his property orIt is regarded as immortal or against the public insurance and public welfare.Enforceability in LawAlthough an agreement may have all the essential elements, it may not be a enforceable contract because of some other is sues like impossibility of performance or where the agreement und uly restrains any person in his trade. So if an agreement emits to suffer the legal requirements of a contract then that becomes nothing but unenforceable by law which cannot turn into a contract ever rather a void agreement.(P1.1). Essential elements of the contract in a given scenario rapture, Owner of a dramatic art offers in face to face, brad to deal out his domicil at a current price. Brad, accept the offer made by Adam and pay a portion of price for the house asked by him.This is an example of a valid contract entered into by Adam and Brad for the sale of the house. In this transaction we will find all the essential elements for the formation of a valid contract. Moreover the contract is execute in a lawful manner. Here, Adam made the Offer which Brad Accepts in his Free Consent and pay Adam a portion of the Consideration (price). Both the parties are Competent to execute a contract and their Object is not too lawful. So the contract of sale of house between Adam and B rad is Enforceable in Law.The impact of different types of contractExpressed and Implied contractIf the offer and acceptance of contract are made in words, i.e, all expressed orally or in words, it is an express one. It can be of two types, i.e. Oral and Written.On the other hand when there is no formal expression of such offer and acceptance rather it is implied from the acts or omission of the parties, it is regarded as an implied contract.Valid contractAn agreement enforceable by law is a contract and is valid. That is to say, a valid contract is that agreement which fulfils all requirements of a contract as imposed by law.Voidable contractThe voidable status of a contract is a temporary status which has to be made enforceable by law or has to be set aside and twain these are dependant at the pick of the parties at one side and not at the option of the other side. The law determines at whose option it will be validated or annulled in each particular facial expression consider ing the genius of voidable contract. Thus a contract cannot sojourn as voidable forever rather it has to be valid or void.Void contractA contract becomes void by ceasing its enforceability by law. It is not a void ab initio. Because, law says that it has to cease its enforceability and it will be void only when it will cease that enforceability. Thus, the precondition of a void contract is the existence of a valid contract and later somehow its enforceability will be ceased and then it will be treated as a void contract. There may have assorted grounds for ceasing the enforceability of law, e.g., supervening impossibility or illegality.Unilateral and Bilateral contractIn the case of bilateral contract each party takes on an obligation, commonly by promising the other for something- as for example James promise to sell something and Ben promise to buy it. By contrast an unilateral contract is one in which only one party assumes the obligation under the contract.damage in contrac ts meaning and effect1. Express damageA. What did the parties say or write?B. Are the statements of the parties terms of the contract.2. Implied termsA. Terms implied by customsIt is well established that a contract may be subjected to terms that are sanctioned by the custom, whether commercial or otherwise, they have not been expressly mentioned by the parties. Precedents states that in commercial transaction unessential evidence of customs and usages is admissible to annex incidents in written contracts, in matters with respect to which they are silent.B. Terms implied by statuteThe translation of usages into agreement and of agreements into statutory terms is around evident in the history of the contracts for the sale of goods. Moreover the provisions of Marine Insurance Act are another(prenominal) example in this regard.C. Terms implied by solicitsOther terms have been judicially implied in a number of transactions. Thus in kill v Thorne,(1956) the Court of Appeal give judg ment in upgrade of the suspect and held that they could not imply any term that would create an dissimilitude with the express language of the bargain. Such a similar position was examined by the House of Lords in Lister v Ramford Ice and Gold remembering Company Ltd and majority of the judge gave judgment in favor of the respondent.Excluding and limiting termsThe common law is quite familiar with the practice of inserting terms excluding and limiting liabilities by one party which would otherwise be his. This situation frequently arises where a documents purporting to express the terms of a contract is delivered to one of the parties and is not read by him. A passenger receives a tatter, stating the terms or referring to the terms set out elsewhere, on which a railroad is prepared to melt down him or take charge for his luggage. There are different view regarding such clauses. One view describes it as a promisors obligation and the other view describe it as mere defense.P1.3 charm terms for a given situationAllan, buy a ticket to go to London from Liverpool. The ticket contains terms that he can carry only 10-kilo of goods and for more than that amount he has to pay extra 5 for per 10-kilo. This is an example of excluding clause in the contract between him and the bus company.Requirements 22.1 Practical application of the elements of contractScenarioAccording to the given problem for this assignment, the avocation advice has been providedAdviceIn the light of sundry(a) elements of a valid contract, John McGurks starting teletypewriter machine is clearly an offer which Collin McCellend was to accept. The general rule is that acceptance takes effect on communication and application of this rule is embodied in the cases of Entores and Brinkibon. Considering that the telex of acceptance was sent outside working hours, when should it take effect, and considering the factors mentioned in Brinkibon- intentions of the parties and commonplace business pra ctice- where should the risk lie? In assessing where should the risk lie we have take into account the fact that Collin can reasonably think that his telex would be read shortly after the lunch hour was completed and to expect John to check where there is any reply from Collin. This is germane(predicate) because in other cases on communications, the court does not entertain the take in of the parties who fail to receive message because of their own fault or negligence(such as it was in Entores case). If Collins telex is deemed to take effect when it is sent, a binding contract between them exist at that point and this will take priority over the contract with ford. We should then consider the position if the rule that acceptance only takes effect on communication is strictly applied. The next issue in question is the communication by the other car dealer from whom Collin learnt that the car has been sold. It is clear from Dickinson v Dodds that study from third party can amount to revocation because the message from the third party is regarded as the offeror had said it himself. However the exception of this rule is that if the reference book of information is not reliable there would be no revocation and the offer would be still available for acceptance. But in the present case this exception is not applicable as the source is not fly-by-night and as such Collin cannot carry John to give effect to his acceptance. However Collin is still entitled to claim damages assuming a contract was made. He could only force John to sell the car to him if court granted specific performance. As the court grant specific performance of contract only when monetary compensation is not adequate to give the plaintiff proper remedy or where there is no other remedy available. Collin can be adequately compensated by money and this could be done by allowing Collin to claim the difference between the cars price and the cost of replacement i.e. more or less 2000.2.2 Law on term s in different contractsTerms of contract can either be conditions or warranties and it vary in various contracts depending on the nature and contents of the contract. Thus terms and conditions in the contract of sale of land are different from that of sale of goods. For better understanding see Terms of Contract- Meaning and Effect part of this paper in page.2.3 Evaluation of the effect of different termsThree kinds of contractual terms have prescriptive effect and significance relative to each others namely Conditions, Warranties and Innominate terms.Conditions These are the most importance terms of contract and have serious consequences if bumped. An innocent party can repudiate a contract and claim damages for rift of such terms. It is not necessary to mark such term as conditions in the contract and court will consider the intentions of the parties to determine such terms. See e.g. Schuler AG v Wickman Machine Tools sales events Ltd. (1974).Such terms can also be determine b y statutory provisions, (e.g. Sale of Goods Act 1979, provides that certain terms relating to title to goods and quality of goods are conditions) and by the case laws, typically standard terms in commercial contracts.Warranties It is of lesser importance than conditions and unwrap of such terms entitled the innocent to claim damages but not to repudiate the contract.Innominate terms It can be either conditions or warranties and breach of them can be serious or trivial depending on the particular fact and conditions. Such terms was first emerged in Hong Kong Fir Shipping Co. Ltd. v Kawasaki Ltd. (1962). See also The Mihalis Angelos case, Bunge Corp. v Tradax Export SA(1981) and The Naxos(1990). Ref.1Requirement 3TortLaw of civil wrong the law of civil wrong but every civil wrong is not civil wrong. For a civil wrong to be tort it must contain two conditions-The remedy is common law action for unliquidated damages andThe wrong is not exclusively a breach of contract, breach of trus t or other merely equitable obligation.Thus Winfield defines tortuous liability arises from the breach of the barter primarily fixed by law and its breach is repressible by an action for unliquidated damages. Ref.23.1 Differences between liabilities in Tort and ContractAs to the source of interest and handicraft The interest in tort and its corresponding handicraft are created by law but in case of contract they are created by the agreement between the parties to the contract.As to the nature of duty In tort duty not to violate the interest of another person is toward persons generally, not to any particular person. In contract such duty is only towards the parties to the contract and not towards any strangers.As to nature of remedy In tort damages are unceasingly unliquidated but for breach of contract liquidated damages can be claimed where specified in the contract.Others Even where unliquidated damages are claimed the principle of liability in tort and contract differ. In co ntract damages are of compensatory nature except in case of contract of marriage and action by bargainer against his banker for dishonoring his check while there is sufficient balance to his credit. In tort, on the other hand, exemplary may in certain be awarded by the court.3.2 Nature of liability in neglectGenerally in all torts the liability is based on intentions or negligence. An act is inattentive if its consequences are neither desired nor are substantially certain but are so probable that a reasonable man would have foreseen and keep down them. Thus, in certain cases of negligence the suspect may not have knowledge of his conduct or consequences thereof, but in many cases he has knowledge of both. It is the element of desire for consequences, which can distinguish negligence from intention. In case of intention actual or presumptive desire is always there, whereas in case of negligence there can never be desire for consequences.3.3 Vicarious liability in businessVicariou s liability means the liability for the wrong committed by another person. Normally, a person is held liable for wrongs committed by him but sometimes he may be held liable for wrongs committed by other persons. greenness example of such liability are liability of master for acts of his servants, done in course of employment, liability of partners for torts committed by a laddie partners, liability of corpus for acts of his doer done within the scope of part and liability of an employer for acts of an independent contractor employed by him.Thus secondary liability in business can be found in the business practice of agency and in partnership business. In both the cases a person who is liable for any breach of contract cannot be held liable rather the person on behalf of whom he enters into contract will be liable. Thus when there occurs any wrong or breach of any contract or any part thereof by an agent acting on behalf of and within the authority of the principal, then the pr incipal and the agent will be held liable. The same rule applies in the case of partnership business and for the wrong of a partner the fellow partners become liable subject to certain conditions and exceptions. Thus in the case of various contracts and business dealings there arises vicarious liability.Requirement 44.1 Applications of the elements of tort of negligence and defences in different business situationsThere are certain general conditions which must be fulfilled or satisfied originally a person can be held liable for any tort. Negligence is one of such essential elements and it has significant effect in the frequent course of various business practices. However negligence can be both, an element as well as a defense in appropriate cases of business.Negligence as elementsNegligence is the lack of application of reason and ordinary prudence on the part of the defendant for, that he can be held liable for any damages results from such damages. In every business practice or in other words, contract it is the duty of both the parties to act and behave in a reasonable and wise manner and perform his obligation diligently. Thus as an independent tort negligence means the infliction of damage by breach of a legal duty to take burster which the defendant owed to the plaintiff. This if there occurs any breach or any party suffer loss for the negligent act and omission of the other, it will entitled the plaintiff seek fill-in and damages for such negligent behave.As a defense, contributory negligenceContributory negligence is a special defense to an action for negligence. When any breach, damage or accidents occurs not solely due to the negligence of the defendant but also partly due to the lack of ordinary care on the plaintiffs part, the part of the negligence of the plaintiff is called contributory negligence because it also contributes towards bringing about of the consequence. The defense of the contributory negligence will fail if there is no lack o f reasonable care and attention on the plaintiffs part.However the scope of the defense was already narrowed by pattern of the rule of last opportunity in Davis v Mann (1842) case. It was further special by extension of the last opportunity rule to situations where actually the defendant was not in a position to avoid the accident but he lost the opportunity because of some of fault on his part. Thus the leading case is, British Columbia Electric Rly v Loach(1916).4.2 Applications of the elements of vicarious liability in given business situationsA, is appointed as agent for B for certain activities with the authority to enter into contract of selling As car. A enters into a contract with C for selling the car for 2500. However after the compellation of the contract it is discovered by A that the car has certain defects which was unknown to A and hence C claims damages.In such a situation A is not liable for the act done by him as he has acted upon and within authority of B. Here not a rather B is vicariously liable and C can sue B, not for his claim.Concluding RemarksThough sources of interest in contract and tort are different yet they may co-exist or concur in the same case. In such case interest is created by the contract as well as general law. In the realm of current business practices contractual obligations and its breach are so much important and in this regard to get proper remedy and appropriate its very much essential to have clear and sound knowledge on contractual obligations, liabilities along with various liabilities of tort law.