Business Contracts: Formalities and Capacities - Coursework Example

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Scenario 2: Business Contracts: formalities and capacities Name: XXXXX Professor: XXXXX Institution: XXXXX Course: XXXXX Date: XXXXX A business contract intends to formalize an agreement betweeen two or more parties. Business contracts can cover a wide range of matters, for instance, on employment terms of an independent contractor relationship, on the sale of goods or real property and ownership of intellectual property developed as part of a work for hire…
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Business Contracts: Formalities and Capacities
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Download file to see previous pages It is viewed as dealing with voluntary undertakings, and gives a high priority to ensuring that only bargains to which people have their true consent are enforceable by courts. Contracts have different classifications. The can be unilateral or bilateral. A unilateral contract is entered into by th e way of exchanging promises of the parties. It is a promise for a promise. Usually, no act of perfomance is necessary to create a bilateral contract. In the case of a unilateral contract the offerer’s offer can by accepted only by perfomance of a certain act by the offeree. The promise is one-sided. Contracts can also be express-an agreement that is expressed in written or oral words- or implied-in-fact-an agreement between parties that has been infrerred from the conduct of the parties. A formal contract requires a special method of creation, e.g. recognizances while those that do not need require such are known as informal contracts. Contracts can be executed or executory. An executed contract is one that has been performed by both sides while one that has not is referred to as an executory contract. Lastly contracts can also be classified as valid, void, voidable or unenforceable. A valid contracts meets all the essential elements of a contract and can be enforced by at least one party. A void contract has no legal effect. A voidable contract is one in which both parties have the option of avoiding their contractual obligations. An enforceable contract has the essential elements to form a valid contract but there is some legal defence its enforcement. A business contract is seen as giving rise to three interconnected elements namely: A promise: reference to a promise may be misleading in the context of English law. The English law does not give effect to a mere promise. An agreement or the meeting of minds is needed. This is a simple way of distinguishing promises that don’t give rise to legal to duty to the ones that do. For instance, a promise to meet another for dinner at 8pm gives rise to no legal obligation- it is a mere promise- whereas a promise to sell someone a machine for ?4000 gives rise to a legal obligation A legal duty arising from that promise: the doctrine here distinguishes between bilateral and unilateral contracts. In the case of a bilateral contract, it gives rise to obligations by all parties. For instance in the sale of goods, the seller has the obligation to transfer title in the item of sale to the buyer, whilst the buyer is obligated to pay the price. In a unilateral contract, only one party is bound. In this case, it is the legal duty of the promisor (maker of statement) to fulfill his promise on the promise (the person to whom statement is made). A remedy for breach of that duty: in consideration of the development of remedies, distinction has to be made in English law between common law and equity. Both have separate sets of doctrines though they are administered in the same courts. Elements of business contacts The following elements are essential for the formation of a valid business contract: Agreement i.e. offer and acceptance Consideration Capacity or competence Intention to create legal relations While some contracts have no special requirement and an oral agreement is binding ...Download file to see next pagesRead More
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