Essential Elements Of A Valid Contract Analysis

Task 1

 Understand essential elements of a valid contract under business context:

Contract:

“Contract is a legal binding or a written or spoken agreement between two parties, which have a tendency of being legally enforceable.” (Collins, 2003)

Valid Contract:

A valid contract is a contract comprising the essential elements of a contract under the law and is enforceable by law. A contract which does not contain any essential element of the law is not considered as a valid contract and is said to be void contract having no value. All agreements are not contracts but only those which are enforceable by law. (Sheth, 2011)

Elements of a contract:

A valid contract must have following essentials to form a valid contract:

1. Offer and Acceptance:

On the condition that he will pay a fixed amount for certain services included, thus both parties are legally bound into a contract. As the contract contains the essential elements; offer and acceptance, legal considerations and is free of consent.

While the construction work is in process, the demand to increase the sum of money is not regarded as lawful action. As far as the contract remained explicit, there is no legal enforceability as none of the party performed unlawful or action against a signed contract. Demand to increase sum by £10,000 is another situation. Murphy demanded more money but he cannot enforce Charles to pay more as once the contract has been signed. But when Murphy demanded through a written note, and Charles accepted, they both then entered into a verbal contract, thus, legally Murphy can enforce Charles for his rights.

Suggestions:

 He may provide strong evidence or prove Charles a defaulter. Through the non-performance by Charles, the contract becomes a “unilateral contract”. Murphy definitely has a right to enforce Charles as he had to pay an additional sum of the amount for the renovations. He may show evidence of payment and claim a payback from

It includes two forms:

1. Tort.

2. Contract.

Tort: It means unlawful actions and one has to pay for the damages caused due to his careless actions. Law of tort implies compensation on the defaulter.

Contract: Contractual negligence means the absence of performance while a party was in to an agreement with another party. If one fails to perform his duty as he agreed upon, he can be legally enforced or sued.

Liability in negligence is due on the following situations:

1. When in contract, a person fails to performs his duty or completely deny his obligations after entering into a contract. For example, as presented in the business scenarios, parties at one end, denies their duty after the performance of the other party, thus in the context of business law, law implies certain compensations on such parties, the party at default becomes liable for paying the compensation or the damaging cost beard by one party.

Law implies terms and conditions on the party caught negligent of his duty. Often law may exempt an agreement from being enforceable in certain