THERE ARE 7 ELEMENTS WHICH ARE REQUIRED FOR THERE TO BE A VALID CONTRACT. LIST AND DISCUSS THEM AND SAY WHAT HAPPENS IF ANY ONE OF THE ELEMENTS IS MISSING.
All agreements are not contracts. A contract is a legally binding agreement between two or more parties. An agreement that is not enforceable by law is not considered a contract. There are many elements that are required for a contract valid, offer and acceptance, intention to create legal relationship, capacity of the parties, consent, consideration, legality of object and possibility of performance. Offer and acceptance – in order to create a valid contract, there must be a ‘lawful order’ by one party and ‘lawful acceptance’ of the same by the other party. An offer is also known as a promise or agreement and it needs to be in the contract. Without an offer there’s no contract. This element is to assure that the contract is legally valid or acceptable. To make an offer there should be at least two or more parties so it is legally capable of entering into a contract. There will be no contract if the parties are negotiating and have no accepted the offer. Intention to create legal relations- If there is no intention to create legal relations in a contract; the contract could be subject to a lawsuit. This element requires parties to come an agreement but it is not contract in the sense. In commercial agreements it is presumed that parties intend to be legally bound unless the parties expressly state the opposite. Consideration- Consideration must be present when entering a contract, not prior. A contract without consideration is a bargain. It is something of value given by the promissor to the promisee in exchange for something of value. Normally the thing of value is a payment. Capacity of the parties- The parties associated with the contract must be proficient. If either party does not have the capacity to contract, the contract is not valid. Persons who are considered to be incompetent to contract are...
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