Essential Elements of Valid Contract

1130 WordsMay 3, 20135 Pages
Essential Elements for Valid Contracts By: M.H.M.Rishardh MBA, BBA (Hons), FCMI (UK), MCIM (UK), Member of AMA (USA). MSLIM, MIM (SL) BCAS Qatar Learning Outcome: On successful completion of this topic you must be able to * Understand the essential elements of a valid contract in Business Context Contracts that meet all legal requirements are valid and enforceable, which means that either party can hold the other party responsible for his or her agreement. 1. Offer and Acceptance To have a valid contract, there must be a meeting of the minds (mutual assent), nominally evidenced by an offer and acceptance. An offer is made by an offeror and expresses that person's willingness to enter into a particular agreement. The…show more content…
e.g. a groom only married his pregnant wife after he was threatened by her father. One month later the marriage contract was cancelled. Legality of Form: This refers to the manner in which the contract is made. It can be oral ( simple contract) or written. E.g. when buying a house a contract must be written. Legality of Purpose: This means that legally binding contracts can only be for legal transactions. E.g a judge will not award compensation to a bank robber whose getaway driver did not show up as agreed!! NB: Invitation to treat is not the same as offer- An invitation to treat invites a person to make an offer to buy something. E.g. a price tag on a pair of jeans is an invitation to buy the jeans. If the customer decides to buy the jeans, this is an offer. If the shopkeeper accepts the offer, this is acceptance, therefore a contract has been made. Termination of a Contract A contract can come to an end when all the responsibilities and obligations that arose under the contract are no longer required. All rights that may have existed are no longer exist when a contract is discharged (ended). A contract may end by the following 1. Performance- This is the most usual way and there must be complete and exact performance by the parties involved. E.g. A two year work contract between an employer and an employee comes to an end at the end of the two years. 2. Agreement- Both parties agree to end the contract early therefore they are free from any
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