Legal Elements of a Business Contract - Coursework Example

 ASPECTS OF CONTRACT AND NEGLIGENCE FOR BUSINESS Task 1 Legal Elements of a Contract The fist legal element of a contract is an offer, which denotes an individual’s willingness to enter into a certain contract with a clear awareness of the specifications of the terms. The person making the offer is usually aware that the contract is to be a legal binding document if the other party accepts it. There must be a clear intention of the individuals to be part of the agreement if the offer is to be considered valid. The second legal element is acceptance expressed as a form of ascension. Acceptance should come from the recipient of the offer and he or she must be willing to accept the terms defined in the offer. In addition, consideration is a third element in contracts and is denoted as a valuable item or cash, which is presented so as to make the contract more binding. For example, a seller may require a buyer to present the payments for goods if they are to be delivered. The payment is considered as a consideration in this case. However, the buyer does not need to buy the full amount. The consideration is only given if there is a promise made (Boundy 2010, p. 64). In addition, the law requires that both parties should have an intention of getting into a contract. They must exhibit the awareness that their agreement is to be bound by law. The contract must be made by people out of their free consent without any form of coercion, fraud, mistake, misrepresentation or undue influence. The individuals must be in their right capacity to make contracts. This refers to the soundness of mind, being of the right age as well as individuals not disqualified by law to make any contract. There must be a lawful object of the contract as well as certainty of the contract. The law also considers the possibility of performance surrounding the lawful object which is the subject of the contract. If it is something that cannot happen, then the law cannot enforce such contracts. Some contracts require legal formalities in form of writing (Boundy 2010, p. 67). Task 2 Impacts of Different Types of Contracts i) Bilateral and Unilateral Contracts Bilateral contracts are made by two parties after agreement of terms and conditions while unilateral contracts only involve one party who presents the terms as well as the offer. Unilateral contracts are commonly applied by individuals looking for lost items who offer rewards to individuals who find them. In unilateral contracts, only one person is bound by the law (Boundy 2010, p. 94). ii) Express and Implied Contracts Expressed contracts refer to contracts whereby both individuals are aware of all the terms and conditions as they are clearly stated in a straightforward manner. On the other hand, implied contracts need interpretation because the terms and conditions are not clearly stated. For example, a lady in a salon is bound by an implied contract classified under implied in fact, while a contract implied in law applies in a case whereby a doctor saves the life of a person involved in an accident (Boundy 2010, p. 55). iii) Void and Voidable Contracts Void contracts usually have one of the critical legal elements missing while voidable contracts are those considered void by the courts because of a rational interpretation of their terms (Boundy 2010, p. 89). iv) Distance Selling Contracts This is a type of contract made either over the phone or through the internet with the supplier of certain goods or services, making a clear description of the goods or services and presenting all the details of the delivery arrangement. The buyer must receive the copy of the contract if it is to be legally binding (Dowding 2008, p. 20). Task 3: Case Study- East Midlands Airways Airbus The contract between Phil, the CEO of Zulu Aviation College and Joseph, the managing director of EMA was done over the phone. According to the legal elements of a contract, it is possible to make a distance sales contract over the phone. However, Phil only entered into a contract with Joseph so that the Airbus may be reserved for his viewing after five days. Since the contract is done over the phone, it may not be legally binding if there is no written copy of their agreements or a recorded copy of the phone call conversation. Therefore, it is not evident whether there is an offer between a buyer and a seller because Phil’s intentions to buy will depend on what he sees during viewing. In this case, it would be tricky if the Airbus does not impress him. Although Joseph has given his consent in this agreement, it lacks a proper basis as a contract bound by law. When presented to a court, this can prove to be a voidable contract (Dowding 2008, p. 22). Task 4: Supply of Mobile Phone Evidently, Key Services Enterprise has a valid contract with Unique Mobile Solutions because there was an accepted offer, a lawful object of the contract, and both companies were willing to get into a legally binding agreement. However, Unique Mobile Solutions breached the contract by supplying mobile phones not allowed for use in the UK and that required two minutes activation for each. Moreover, the software for the mobile phones failed because of the poor design by the company. The problem is that Key Services Enterprise Limited did not take note of the exclusion clause written at the back of the receipt that they received. In a court of law, the breach of the contract would be identified as well as an unreasonable exclusion. According to the UK law, the exclusion clauses do not apply to the goods if they are defective, and Unique Mobile Solutions should accept the liability in this case (Dowding 2008, p. 21). Bibliography Boundy, C 2010, Business contracts handbook, Farnham, Surrey, England: Gower Pub. Dowding, T 2008, 'U.K. truncates liability claims reform', Business Insurance, 42, 33, pp. 21-22, Business Source Complete, EBSCOhost, viewed 5 August 2014. Read More