Essentials of a Valid Contract - Report Example

Part Essentials of a Valid Contract In a perfect business world, a contract will serve as basis for execution of certain agreed-upon conditions and will act as a mechanism to prevent and settle disputes and litigation. Fundamentally, a contract is an agreement to do or not to do something. While to say that the contract is valid entails the fact that such agreements are legally binding and enforceable. The goal of the contract is to clearly indicate the agreement so the ‘object’ is accomplished (Steingold, 2009). Although contracts are said to be the ‘meeting of minds,’ it is basically important that they should be encapsulated in the printed page. But whether contracts are entered orally or in the written form, they should include the following essential elements for them to be deemed valid: parties capable of contracting, consent of the parties, lawful objects, and consideration (Bhana, Bonthuys, & Nortje, 2009). First and foremost, parties capable of contracting are those of legal age and are not convicted of any crime and thought to have mental or behavioral disorders. Hence anyone, save from the aforementioned exceptions, can enter into contract. In most instances, parties who involve themselves in these legal agreements should provide accurate and sufficient identities: full names, addresses and even titles. In sales contracts, moreover, the terms ‘seller’ and ‘buyer’ are oftentimes designated to the contracting parties (Steingold, 2009). Consent of the parties, which are free, mutual and well-communicated, qualifies for a valid contract. Consent obtained through intimidation, violence, fraud, undue influence and mistake does not make any contract valid. Similarly, consent is not considered mutual unless both parties agree on the same thing in the same sense. Basically, the articulation of an offer and an acceptance from contracting parties are required to make a contract valid (Helewitz, 2010). Furthermore, the thing being referred to in a contract is also called as the object. Objects must be lawful, possible and definite (Helewitz, 2010). Any law of court would not enforce any contract to perform an illegal act. Therefore, disputes in drug deals are not accommodated in legal agencies due to the fact that the contracts concerned are null and void. Of particular importance also in the determination of validity in contracts is consideration: meaning, each party must gain something out of the said agreement (Walston-Dunham, 2008). For example, if someone agreed to repair someone else’s house, and the latter never promised to give anything in return, then the one asked to do the service could not be sued for not showing up because he did not obtain consideration, in this matter. Objective Theory of Contract There are two approaches in deciding whether or not a party has entered into a valid contract. For the most part of legal history, the Subjective Theory of Contract happened to be the universal doctrine. However, during the late nineteenth century, the Objective Theory of Contract had been adopted by majority of lawyers and judges when deciding the merits of a contract dispute case, downplaying the former theory. Essentially, the recent theory upholds that the intention of the parties to a contract or an alleged contract, for that matter, is to be determined from their words and conduct, rather than their unexpressed or supposed intentions. Hence, it eradicates the subjective notion of intention (‘meeting of minds’ concept) which was deemed by most legal experts as vague and prejudicial (“Objective Theory of Contract,” 2011). But even though the Objective Theory of Contracts applies virtually in all jurisdictions, some aspects of subjectivity are nevertheless existent still. For instance, several strong cases for the nullification contracts are raised via the grounds of mistake or duress, which are practically based upon the subjective beliefs or intentions of one party of another (Farnsworth, 1999). In the ‘Harrier Jet’ Case Theoretically, a party’s intention is considered to be what a ‘reasonable’ person in the position of the other party would think that the first party’s objective manifestation entailed (Farnsworth, 1999). In this regard, reasonable intent would mean that there is seriousness over the objects of the contract. Court rulings, as a general practice, would ascertain whether or not the party is sincere with the ‘offer’ that it presents. In the case where a man sued a company for not keeping its promise of a reward, which was basically a material for advertisement, the Objective Theory of Contract should be considered in perspective. As the said theory argues for the reasonability or the purported seriousness of the ‘offering’ party,’ then the legal decision is beyond question. The federal judge believed that the company was only joking when it implied in its advertisement campaign that it was giving away fighter jets, an estimated amount of $23 million per aircraft. He knew the fact that the company was only employing such promotional strategies to generate public attention, and never really intended to offer consumer an extremely sophisticated and expensive reward by the name of a Harriet jet. To consider such an advertisement material as genuine and sincere seems to be a product of a naive mind. Thus, consumers should only see TV ads such as this as ridiculous and should never commit to them at heart. Significantly, three of the essential elements of a valid contract were not present in situation of the Harriet Jet case. The complainant and the defending party never consented into anything; only that the defendant made an announcement in public media that did not necessarily claim to be believed in (although, there was a violation of ethical standards). The element of lawful object was not also sufficed in the said case, as the referred object to be given, a fighter jet, was not in any way possible. There was also no definite offer made by the company (specifications are substantial in these kinds of cases). And ultimately, the absence of consideration for the offering party is noticeable. The question as to how the company would benefit from offering the said expensive yet unreasonable rewards remains unanswerable because it was not stated in the ad material. Advertisements: ‘Not Offers’ An offer is the demonstration of willingness to enter into bargain, which justifies another person in committing that his or her agreement to it can conclude the bargain. In other words, an offer is something that generates a capacity of acceptance (Richards, 2007). It should be noted that advertisements in print and broadcast materials are not offers to sell due to the fact that they do not contain adequate words of commitment to sell. Commitment, for this matter, should involve specific terms and words of assurance and responsibility (Richards, 2007). Particular number of units, price and dates are imperative in this aspect. While, details of how to purchase, how to join a certain contest, and how to claim the prize are also the determining information that the company has the commitment to sell, hence the offer is valid. Not a Unilateral Contract The following case, in essence, is different from a reward situation of a unilateral contract, in the primary sense that it stems from an advertisement material where neither seriousness nor the element of offer is present. In a unilateral contract, an offeror’s promise should be rendered upon the completion of the offeree’s act, however in the said case, the company did not specifically and categorically made any promise and did not unequivocally instructed the consumer of what to do. Specification is absent. Theoretically, a notice of acceptance is also required for a unilateral contract to be enforceable. Nothing can be made out of this requisite, as both parties never entered into agreement in the first place. References Bhana, D., Bonthuys, E., & Nortje, M. (2009). Students guide to the law of contract. Berlin: Kluwer. Farnsworth, A. E. (1999). Contracts. New York: Aspen Law & Business. Helewitz, J. A. (2010). Basic contract law for paralegals (6th ed.). New York: Aspen. Objective Theory of Contract. (2005). In Wests Encyclopedia of American Law. Retrieved from http://www.encyclopedia.com/doc/1G2-3437703138.html Richards, P. (2007). Law of Contract. New York, NY: Pearson Longman. Steingold, F. (2009). Legal guide for starting and running a small business. Berkeley, CA: Nolo. Walston-Dunham, B. (2008). Introduction to law. Thousand oaks, CA: Cengage Learning. Part 2 Towards a Drug-Free Workplace Drug testing is as highly sensitive issue in the world of work. However, it is an effective way to confirm the risks involved in workers who use such illegal drugs and to ensure a healthy work environment. While some may argue that such action by the employer is intrusive to the privacy rights of the employees, it is indisputable that when safety and productivity are compromised, then there is no legal violation that the former commits (Moore, 2010). Substance abuse and addiction to alcohol pose detrimental effect to the efficiency and output of workers. Aside from inflicting risks to oneself, a worker who use drugs becomes a threat to his or her co-worker, supervisors and managers, and the customers at large (Maisto, Galizio, & Connors, 2010). But on the other hand, most experts agree that universal drug testing and random testing procedures are not the best way to trim down drug-use incidences in the workplace. The purported effective and legally-warranted drug test is only directed towards those who exhibit manifest signs of drug use -- affecting attendance and productivity. Likewise, those who are working on relatively hazardous environments and tasks such as a pork lift operator or a security guard and those who were involved in accidents can be instantly subjected to a drug test (De Bernardo, Delogu, & Mendelson, 2001). Ideally, employers and managers should institutionalize drug-free work zones and develop programs to support such a campaign. Upon employment, workers should be required to sign a written understanding and agreement to the drug test policy of the company in order to avoid any legal implication in the future. References De Bernardo, M. A., Delogu, N. N., & Mendelson, L. (2001). Guide to state and federal drug testing. Reston, VA: Institute for a Drug-Free Workplace. Maisto, S. A., Galizio, M., & Connors, G. J. (2010). Drug use and abuse. Thousand oaks, CA: Cengage Learning. Moore, A. D. (2010). Privacy rights: Moral and legal foundations. University Park, PA: Penn State UP. Read More