- Understanding the Essential Elements of a Valid and Legally Binding Contract

A contract is a written, oral, or implied agreement between at least two parties, an offeror and offeree. Contracts are created to facilitate the transfer of property, provision of services, or other rights. For a contract to be enforceable it needs to meet four basic requirements: agreement, consideration, contractual capacity, and needs to include a lawful object. Contracts are designed to be enforceable by law, ensuring all parties meet their contractual obligations to the other parties. An example of an enforceable contract is two parties agree transfer ownership of a vehicle owned lawfully by one of the parties for $100.00. The contract is enforceable since the parties entered an agreement, for the consideration of $100.00, one of the parties lawfully owned the vehicle, and the contracts object is lawful.

This paper is composed for the individual assignment for week 1 of the MBA 633 Legal Issues in the Workplace course. The topic for this assignment consists of the four sources of law used to govern businesses and how disputes can be settled. I will be providing short answers to questions related to the four sources of law.

Void contract: A Contract that failed to satisfy all or any of the essential elements of a contract and which is not enforceable by the court. Any contract not enforceable by law is said to be void. A void contract has no legal fact. It confers no right on any person and created no obligation.

Express terms are terms of the contract that are explicitly agreed on by all parties involved either in verbal or written form (James, 2014, p284)

A contract is an exchange of promises or a promise in exchange for performance, for breach of which the law gives a remedy, per Restatement 2nd of Contracts §1. For the contract to be valid there has to be mutual assent, parties mutually agree upon the same specific thing. Per Restatement 2nd of Contracts §54, there are two types of contracts: unilateral, where acceptance is by performance, and bilateral, where there is an exchange of mutual promises and both of the parties have the rights and duties.

Offer – to form a contract there must be an offer by one party. It is a definite and clear statement of willingness to be bound on stated terms without further consultations. Offer can be in written or oral form but it is not effective if it is not being communicated to the offeree.

C)Valid contracts are that enforceable at law.Void Contracts are unenforceable at law.Unenforceable contracts can’t be compelled in a court.Voidable Contracts might appear to be valid.

For example, I purchase a DVD player from my neighbor and my friend told that I can get the same DVD player at Walmart cheapest. So I decided to return and demanded my money back. This is a voidable contract both parties may avoid the contract if either so desires. Another example is a void contract is, strictly speaking without a contract. There is also a formal and informal contract. Formal contract must abide by requiring that a contract be in writing. We all know that most of the contracts are informal in

Both parties agree that any part of the agreement may be held unenforceable, then that section will be removed from this agreement. Only that part of the contract will be removed and all other parts will remain in effect. Both parties must mutually agree.

Contracts can be unenforceable if the terms are unclear or the required elements are not present. If the buyer does not receive exactly what is required in the contract then the buyer can invoke the perfect tender rule. The contractee can revoke his acceptance because of nonconformance.

As mentioned in “The Legal Environment of Business” by Don Mayer, Daniel M. Warner, George J. Siedel, and Jethro K. Lieberman, a contract can be defined as a legally binding agreement. The requirements of a contract include an agreement meaning tan offer that has been accepted, consideration which is something of value, legal purpose defined as the requirement that the consideration matter be legal, proper form which is the requirement that certain contracts be in writing, and two or more competent parties. When a contract is formed it must be established whether the contract bilateral or unilateral.

Implied terms of employment are terms, which are not identified between an employee and employer, these are broad terms, of which there are 4 types. These are Terms implied in fact, terms implied by custom or practice, terms implied by law, and terms implied by statue. Terms implied in fact usually used to make logic of what was written down in an employment contract

Contractual agreements are supposed to be consensual, and freely entered into by the parties involved. Therefore, ‘before a court enforces a relationship as a contract, the courts must have a reasonably certain basis in fact to justify binding the parties to each other.’ (St. John’s Law Scholarship Repository, no date). Resolution of whether a contract was intended to be legally binding is not determined by what the parties themselves thought or intended. Rather, a more objective stance is taken by the courts. This is known as the objective theory of contract, and essentially enables ‘the courts to look at external evidence (what the parties said and did at the time)’ (Poole, 2006, p. 34), as to objectively indicate the parties’ intentions

Implied terms are terms that are assumed and expected to be carried out. They do not have to be communicated since it would be reasonable to assume that both parties are aware of them. To put this into context let’s take the example of the man at the restaurant. He orders his meal, eats his meal and then walks out the restaurant instead of paying at the end. He claims he was never asked to pay, so he doesn’t need to. He is in the wrong since it is an implied term that after a meal the customer must pay the restaurant for their order. If he walks out without paying he is breaching the contract and breaking the law. The restaurant are entitled to sue for damages and use the law against the customer.

A contract is a written or spoken agreement between two or more parties that involves the exchange of two promises, which is intended to be enforceable by law. The four basic elements are the offer, consideration, acceptance, and mutuality. When elements are broken down individually, each one is just as important as the next. If one of these elements are broken or misunderstood, it could mean result in the contractual agreement becoming not valid and end in lawsuit. The overall purpose of the contract is for legal purpose and to keep a order within an agreement.