Working with and Leading People

In: Business and Management

Submitted By mihaela17
Words 7547
Pages 31
Aspects of Contract and Negligence for Business


1. Explain the importance of the essential elements required for the formation of a valid contract.
A contract is much more than an agreement between two people. There must be an offer and acceptance, intention to create a legally binding agreement, a price paid (not necessarily money), a legal capacity to enter a contract of your own free will, and proper understanding and consent of what is involved. (Begg, 2009)
1. Offer and acceptance= Agreement
A contract is formed when an offer by one party is accepted by the other party.
An offer must be distinguished from the mere willingness to deal or negotiate. For example, X offers to make and sell to Y calendars featuring Romanian paintings. Before any agreement is reached on size, quality, style or price, Y decides not to continue. At this stage, there is no legally binding contract between X and Y because there is no definite offer for Y to accept the essential terms of the bargain has been decided. An offer needs not be made to a specific person. It may be made to a person, a class of people, or to the whole world.
Acceptance occurs when the party answering the offer agrees to the offer by way of a statement or an act. Acceptance must be unequivocal and communicated to the offer or: the law will not deem a person to have accepted an offer merely because they have not expressly rejected it.
2. Consideration is the price paid for the promise of the other party. The price must be something of value although it need not be money. Consideration may be some right, interest or benefit going to one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other party.
So long as consideration exists, the court will not question its…...

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