January 27, 2013
BUSN-420 Week 3: Individual Assignment
What is required for a valid offer?
There are six parts to the formation of a valid contract:
1. An intention to create a legal relationship – In short, both members must be of sound mind and have a clear agreement that a contract (or arrangement if verbal) will be formulated between the two parties. Either side of the party cannot be tricked into the contract. 2. Offer – The request for services, a product, or arrangement from one party to another in exchange (or barter) for another object, service, monetary exchange, or equal arrangement that stands to be legally sufficient for the offer. An offer can be made, within reason and timing through verbal, electronic, or physically documented means. 3. Acceptance – After an offer, the second party agrees to the terms of the offer from the first party. An acceptance can be nullified if the first party revokes the offer before an acceptance is made, a reasonable time period has elapsed, or the second party rejects the offer. Under certain circumstances, the second party can accept an offer with added conditions; this is considered a counter offer and is commonly seen in real-estate. In the case of a counter offer, the original party will become the accepting party of an offer. 4. Consideration – Refers to the act of the offeree to actually receive from the oferer what was promised by the contract. For instance, a contracting company offers to build a deck on a house for $5000. The deck is built correctly and payment must be given to the contracting company that built the deck. 5. Capacity to contract – Can the parties entering into the contract both be bound by the terms of the contract? In the instance of a case for a minor entering into a contract, no, because the law prohibits anyone under the age of eighteen years of age to be bound to a contract because they are technically not an adult....