The different elements of a contract

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Date added: 17-06-26

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Mission Statement: Our mission is to take a genuine interest in our clients, understand their objectives, and meet or exceed their expectations. Keyz Law Firm is a business consulting firm within Jamaica. This firm was founded by Tauna-Shay Palmer and Jon-Ross Kelly in 1997. This establishment is located in New Kingston. The location is very good for business because there are a lot of small business within that area. Keyz Law Firm is a firm which was developed to help small businesses with their problems and to help them to develop effective plans to meet their goals. This firm targets small businesses because research shows that they face more struggles in their day to day business operations than large businesses. Cake It Away Mission Statement: to provide a product of the greatest possiblevalue to our customers, thereby gaining and holding their respect and loyalty while achieving sufficient profit to finance our company and its growth. Cake It Away is a well-established cake shop that is located in Half-Way-Tree downstairs the Transport Centre. This business is a sole proprietorship owned by Andrew Tai and has been operating for six (6) years. A wide variety of specialty cakes are offered at premium prices. Cake It Away specializes in visually creative and attractive cakes. An option for custom made cakes is also available as well as delivery services as a means of giving consumers exactly what they want. This business targets events such as birthday parties, weddings and bachelorette parties. Service is available 24 hours each day. However, the owner of Cake It Away has limited business law knowledge and is not sure of the different steps he can take when he is faced with different contractual situations/ Objectives
  • To explain the importance of the elements required for the formation of a valid contract.
  • To discuss the impact of different types of contracts.
  • To evaluate the effect of different terms in given contracts
  • To apply the elements of the tort of negligence and defenses in different business situations.
Literature Review According to Koffman, Macdonald (2010), a contract is a legally enforceable agreement giving rise to obligations for the parties involved. The laws contract determines which agreements are enforceable and regulates those agreements, providing remedies if contractual obligations (undertakings or promises) are broken. In line with Small Business Development Corporation (2013), there are four (4) essential elements of a contract. They are:
  • Offer- there must be a definite, clearly stated offer to do something.
  • Acceptance- only what is offered can be accepted. This means that the offer must be accepted exactly as offered without conditions. If any new terms are suggested this is regarded as a counter offer which may be accepted or rejected. Acceptance can be given verbally, in writing, or inferred by action which clearly indicates acceptance.
  • Consideration- in order for a contract to be binding, it must be supported by valuable consideration. That is to say, one party, promises to do something in return for a promise from the other party to provide a benefit of value (the consideration). Consideration is what each party gives to the other party as the agreed price for the other’s promises.
  • Intention to create legal relations- a contract requires that the parties intend to enter into a legally binding agreement. That is, the parties entering into the contract must intend to create legal relations and must understand that the agreement can be enforced by law. If the parties to a contract decide not to be legally bound this must be clearly stated in the contract for it not to be legally enforceable.
In keeping with Wiilliam Markham (2002), the importance of having a contract is to make the agreements between the parties enforceable, which usually means that it allows one party to a contract to obtain monetary damages from the other party upon showing that the latter stands in breach. There are several types of contracts but however only 4 types will be explained. They are Express Contracts, Implied Contracts, Executed Contracts, and Executory Contracts. According to Farlex (2014) In an express contract, the parties state the terms, either orally or in writing, at the time of its formation. There is a definite written or oral offer that is accepted by the offeree (i.e., the person to whom the offer is made) in a manner that explicitly demonstrates consent to its terms. In keeping with Law Exams (2005) An implied contract can either be implied in fact or implied in law . A contract which is implied in fact is one in which the circumstances imply that parties have reached an agreement even though they have not done so expressly. For example, by going to a doctor for a physical, a patient agrees that he will pay a fair price for the service. If he refuses to pay after being examined, he has breached a contract implied in fact. Goldman and Sigismond (2013) an Executory contract is one that is not fully performed by one or all of the parties while an Executed contract refers to a contract in which all the parties have completely carried out their parts of the contract. Contracts may be brought to an end: Your approval then go to contact your friends and receive financial struggles. Everyone has made it typically a traditional job in business cash law you clearly understand this. (a) By performance of the parties i.e. each party completing his obligations as stipulated by the contract. (b) By frustration i.e. an event through no fault of the parties that make one party unable to perform the contract. For example: if one party suffers a prolonged illness which makes him unable to perform the contract. (c) By lapse of time i.e. if the time limit set for the contract to be executed by both parties has been passed. For example, sellers of real estate usually require that the buyers pay the full balance on the property within a certain time period after the initial down payment has been made. (d) By the mutual agreement of all parties. (e)If one of the parties become bankrupt after the contract has been signed. (f) By changes in law i.e. where a legal contract is rendered illegal through changes in law. (g) By notice e.g. some firms require that employees give at least one month notice when resigning their positions. (h) If one party dies. (i) By breach of contract-When one party defaults on his part of the agreement i.e. he does not perform his part of the contract. Methodology In gathering information for this research only secondary sources were used. The secondary sources used were books and several websites. The researcher found the information found on the internet more useful because different situations were shared in which the different contracts are to be used and the different damages than can be claimed for in the event of a breach. References Koffman, Macdonald , L.K, E.M, 2010. The Law of Contract. 5th ed. New York: Oxford University Press. Small Business Corporations. 2013. Four Essential Elements of a Contract. William Markham. 2002. The Extraordinary Importance of Contract Law. [ONLINE] Available at: http://www.markhamlawfirm.com/law-articles/contract-lawyer-san-diego/ The Free Dictionary by Farlex. 2014. Types of Contracts. [ONLINE] Available at: http://legal-dictionary.thefreedictionary.com/Types+of+Contracts. LawExams.com. 2012. Express and Implied Contracts. [ONLINE] Available at: http://lawexamm3es.com/implied-contracts.
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