Running head: ELEMENTS OF A 1
Elements of a Contract
BUS 670: Legal Environment
Porf. Stacey Callaway
October 6, 2014, 2014
ELEMENTS OF A 2 Elements of a Contract
Indeed, contracts plays a very significant role in all aspects of society; according to Nysten & Lehto, (2012), “Business people often understand contracts as legal documents, designed by lawyers in order to protect firms against risks and prepare them for potential litigation in the worst case scenario” ( pp. 462-478). However, there are indeed various elements that directly contributes to the formation, and subsequent validation of a potential contract. As such, with regard to the contract involving the noncompetition clause at Fabulous Hotel, I will describe each of those individual elements, as they relates to that particular contract. Additionally, I will give the specific reasons why this particular contract is either covered by common law, or the uniform commercial code; as well as show two potential circumstances where this contract would be unenforceable. Although this contract contains a noncompetition clause, it must nonetheless meet the criteria--in order to determine its validity--which a contract would have to meet if it did not contain such a clause. Seaquist (2012) relates to this wherein she says, “Although all contracts contain promises that are enforceable, not all promises rise to the level of a contract. Rather, only promises that meet certain criteria are considered to be valid contracts” (p. 9.2). As such, there are five elements that are given; elements which invariably determines the validity of a given contract; the first of these five are what has been termed the offer. Indeed, Seaquist (2012) has defined the element of the offer in the following way; she states, “The two parties to a contract are the offeror (the person making the offer) and the offeree (the person who has the power to accept the offer)” (p. 9.2). ELEMENTS OF A 3 Thus, as far as the offer is concerned, this non-compete contract is enforceable because the clause is contained in writing in the original contract with Fabulous Hotel. Additionally, the second element that contributes to the validation of this contract is what is termed as acceptance of the offeree. According to Jalil (2011) “To make a valid contract acceptance is pertinent. Similarly, the acceptance must be communicated to the offeror. An acceptance is effectively communicated to the offeree when it comes to the knowledge of the offeree. If it does not come to the knowledge of the offeree, as a general rule, the acceptance would not be valid” (pp. 109-122). Indeed, upon signing the contract, the Fabulous Hotel employee was aware of the noncompete clause; moreover, acceptance was effectively communicated at that time; as such, the contract is valid as far as the element of acceptance is concerned. In addition to the first form of acceptance, the Author (2012) states further that: Final and unqualified assent to the terms of the offer is known as acceptance and it is made in the manner specified or indicated by the offeror. The offeree must accept the terms of the offer as they are, without any modification. If he modifies the terms of the offer, there is no acceptance, rather the offeree makes a counter-offer (pp. 109-122). The third element of the contract is what Seaquist (2012) defines as consideration; she states, “To have consideration means that the promise by the promisor gets the promisee to do something he or she was not previously legally bound to do” (p. 9.2). Moreover, in utilizing...
Please join StudyMode to read the full document