Aspects of Contract and Negligence for Business
Aspects of Contract and Negligence for Business
Introduction:
A contract between two parties is important for making any agreement. But not any agreement is contract. When there is an enforcement of law in an agreement, it converts into contract. There are many formalities to make a contract. Everything is not done when a contract is made. There may exist negligence either one party or both. For the negligence occurred one party, liability is imposed on another party. The law of tort differs from the law of contract. This concept helps to examine issues of liability in negligence in business context and how they can be avoided.
LO1: Understand the essential elements of a valid contract in a business context.
1.1 Explain the importance of the essential elements required for the formation of a valid contract.
The agreement which is enforceable by law is called contract. All contracts are agreement but all agreements are not contract. There are some elements of a valid contract that are essential to be enforceable by law. All these elements are important for a valid contract. If nay of them is absent, the agreement will be a contract.
a. Offer and acceptance:
First step for starting a contract is one party making proposal or offer to another party which will be lawful and the party to whom offer is made will accept the proposal when accepted becomes promise.
b. Consideration:
The cause of promise is consideration. Without consideration contract is void. For an example, A agrees to sell a house to B at $400,000. B also agrees to pay $400,000 for the house. This $400,000 is consideration. Consideration is unlawful when:
It is fraudulent; forbidden by law; court may regard it as immoral;
c. Capacities of parties:
Every parties involved in the contract should be mentally sound and competent for the contract. Followings are the persons who are incompetent for the contract:
Miner;
Persons disqualified by any law;
Persons of unsound mind.
d. Free consent:
Free consent
Introduction:
A contract between two parties is important for making any agreement. But not any agreement is contract. When there is an enforcement of law in an agreement, it converts into contract. There are many formalities to make a contract. Everything is not done when a contract is made. There may exist negligence either one party or both. For the negligence occurred one party, liability is imposed on another party. The law of tort differs from the law of contract. This concept helps to examine issues of liability in negligence in business context and how they can be avoided.
LO1: Understand the essential elements of a valid contract in a business context.
1.1 Explain the importance of the essential elements required for the formation of a valid contract.
The agreement which is enforceable by law is called contract. All contracts are agreement but all agreements are not contract. There are some elements of a valid contract that are essential to be enforceable by law. All these elements are important for a valid contract. If nay of them is absent, the agreement will be a contract.
a. Offer and acceptance:
First step for starting a contract is one party making proposal or offer to another party which will be lawful and the party to whom offer is made will accept the proposal when accepted becomes promise.
b. Consideration:
The cause of promise is consideration. Without consideration contract is void. For an example, A agrees to sell a house to B at $400,000. B also agrees to pay $400,000 for the house. This $400,000 is consideration. Consideration is unlawful when:
It is fraudulent; forbidden by law; court may regard it as immoral;
c. Capacities of parties:
Every parties involved in the contract should be mentally sound and competent for the contract. Followings are the persons who are incompetent for the contract:
Miner;
Persons disqualified by any law;
Persons of unsound mind.
d. Free consent:
Free consent
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