Unit 3 Organisational Behaviour, Unit 5 Aspects of Contract and Negligence for Business, Unit 31 E-Business Operation - Assignment Example

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Although oral agreements are made based on trust and confidence, it is the existence of written agreement that formally binds individuals with a business during its operations…
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Unit 3 Organisational Behaviour, Unit 5 Aspects of Contract and Negligence for Business, Unit 31 E-Business Operation
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Download file to see previous pages Valid contracts act as tools for a business enterprise that can be used as defence mechanism to protect its resources. Contract is essentially a promise between two or more parties, and the promise is legally bound with the implication that court of law will intervene in case there is any breach of the promise (Ryan, 2005, p.3). There are various essential elements for the formation of a valid contract. First of all, there must be an offer made by one or more parties and acceptance of the offer by other parties. An offer is a legally bound promise which means all the terms and conditions attached to the offer have been accepted by both parties. Acceptance occurs when the party responding to the offer expresses agreement to the offer, and the acceptance must be explicit and unequivocal as law will not consider an offer as accepted merely because it has not been expressly refused. There must also be a clear intention of both parties to enter into a legal relationship. The parties to the contract should also be capable to enter into a legal relationship like the involved persons should be adults, mentally fit, and mentally alert so that they are aware of the terms and conditions of the contract. A person is considered an adult when he or she is of legal age requirement. In most countries the legal age requirement is 18 years. A person is not considered mentally fit if he has been declared mentally incompetent by the court. Finally, a contract signed by an intoxicated person is not considered as valid contract since such a person is not mentally alert to become aware of the terms and conditions of the contract. There should also be free consent from both parties, i.e. neither party should force the other party to enter into a contract. When a valid document is signed it becomes a legally bound contract and is assumed that all the terms and conditions have been understood by both the involved parties.
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