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

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CONTENTS

Introduction…………………………………………………………….. 3

Task 1…..…………………………………………………………….…. 4

Task 2 ……………………………………………………………………8

Task 3 …………………………………………………………………...9

Conclusion……………………………………………………………… 10

References………………………………………………………………. 11

INTRODUCTION

In Assignment 1 in Common Law the basic notions relevant to business activities will be viewed. The purpose of this assignment is to apply basic theoretical knowledge of common law to day-to-day business practice. In this assignment particular cases will be considered from the legal standpoint.

Legal aspect has always been important to any kind of business. Depending on the scale of operations we can see legal departments in large multinational corporations or small companies outsoursing lawyers or getting legal consultations. Knowledge of the law not only allows identifying what’s legal or illegal and not to break the law, it also helps securing the company from fraudulent or unlawful actions.

Assignment 1 primarily deals with key elements of Contract Law. In the assignment main parts of any contract and various types of business contracts will be considered, and such topics as „What makes a valid contract?“ will be discussed. Rules of offer and acceptance as well as rules of intention and consideration will be viewed in terms of specific situations. At the same time, theoretical part of the assignment will be linked to some particular cases in business, and through the synthesis of ideas the relevant decisions will be made. In the end based on the results of the research and case study I will make conclusions and evaluate my work.

Task 1.

Explain the different types of business agreements that can exist and the importance of key elements in the formation of a valid contract. With reference to the details for Carlill Vs. Carbolic Smoke Ball Co. case (1893) provided in the learning Centre explain why this case was important in defining the key elements of an “Offer”. ____________________________________________________________

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A contract is a legal term for an agreement binding exchange of promises or agreement between parties that the law will enforce. Agreements can be both written and oral. Contract law can be classified as civil in nature or it falls within the civil legal system. (Gahir, 2009)

Business agreements can be subdivided into many different types and categories. The reason for this is simple – most of business activity needs to be documented, what makes agreement conditions legally-binding and secures interests of both parties. We can browse the agreements depending on the the field in which it is being used: •Compensation

- Employment
- Stock Options
- Severance
Finance
- Credit
- Loans
- Warrants
Business Formation
- Bylaws
- Incorp.
- LLCs
Intellectual Property Licenses
Business Planning
- Mergers
- Spin-offs
- Stock Purchase
Business Operations
- Real Estate
- Sales
- Services
Corporate
- Governance
- Indemnification
- Nondisclosure
Securities
- Shareholder Agreements
- Registration Rights
(Moodle, 2009)

However, based on Common law lectures (Gahir, 2009) and related resources on Moodle (http://courses.praguecollege.cz/mod/resource/view.php?id=20727), we can also distinguish the contracts depending on its features and conditions:

1)Bilateral Contract – is one of the common contracts. In bilateral contract a promise (offer) is made by one party in return for a promise made by another party. The offeror and the offeree make promises, and these promises are the bases of the contract.

2)Unilateral Contract – is an agreement in which an offer is made by one party in return for the performance of a specific act by the other party. This means the act should be performed first, and then the contract becomes effective.

3)Valid Contract – is a contract containing all the essential elements of any agreement: offer, acceptance, consideration,...
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