1. Business agreement:6
2. Requirement to form a valid contract:9
Task 2: Explain the differences among conditions, warranties and innominate terms with examples to illustrate:22
Task 3: Law on standard form contracts:24
The knowledge of the law of contract is very importance when doing business. Law of contract is a part of Common law which focus on the formation and operation of a business contract. This report will analyze different types of business agreement and the requirement of a valid contract. In addition, it explain the differences between condition, warranties and innominate term of a contract.
1. Business agreement:
Business agreement is a agreement made between two parties which intend to have an exchange of goods or services that are value and make it into a business contract. Business agreement is the first essential element of a business contract which is legally binding. There are various types of business agreement. It can be classified by the purposes, the forms or the obligation binding of the agreement.
1.1 Consumer contract and non-consumer contract:
Firstly, based on the purpose of the contract, we can divided business agreement into two group which are consumer contract and non-consumer contract,. The consumer contract is an agreement to supply goods or services between the provinders and the consumers in which the consumers purchase goods or services for their own needs only and do not intend to make profit from it. A contract which will be considere as the consumer contract if it meets all three conditions following: * The buyers purchase goods or services for their personal, domestic or household use or consumption. For example, the buyer purchases coffee to drink at home. It will be considered the consumer contract. However, if he buys coffee to sell at his coffee shop to make profit, it will not be considered the consumer contract. * The provider supply the products or services for the purposes of ordinary personal, domestic or household use or consumption. For example, if the provider sell table and chair for household used, it can be considered that it is the consumer contract. Nevertheless, if the provinder sells coffee table and chair to used in a coffee shop, this contract cannot be seen as consumer contract because the furniture is used to made profit. * The goods are of a type ordinarily supplied for private use. For example, if the buyer buys a SUV to drive to the office, it will be the consumer contract. However, if he buys the bus to drive to the office, this contract will not be considered the consumer contract As a result, to become the consumer contract, the contract needs to meet all three conditions above. If it does not satisfy one of these conditions, it will become non-consumer contract.
By contract, the non-consumer contract is the contract between business and business which mean the goods that is exchanged is later used for business purpose or make profit. For example, A restaurent buys vesgetable from wholesale to cook for the customers. Moreover, most of non-consumer contract also has exclusion clause to protect one party. This clause has different effect between consumer contract and non-consumer contract. For consumer contract, exclusion clause is only valid for warranty term. It is invalid for condition term such as correspondence with description, merchantable quality or fitness of purpose. For non-consumer contract, the exclusion clause would be valid if the contract is reasonable and it is invalid for title in any case for all business agreement.
1.2. Written agreements and oral agreements:
Secondly, the business agreement can be categorized by their forms as oral agreements and written agreements. An oral contract is an agreement that was...