1: A VALID CONTRACT IN A BUSINESS CONTEXT
1.1 The importance of the essential elements required for the formation of a valid
Everything requires some principles that should be followed to make it a good one. Therefore to make a valid contract there are also some principles to be followed during making it a good one. The basic principles that should be followed by Mr.X to make a contract agreement with Mr.Y are as follow-
Offer and acceptance
There must be a lawful offer and a lawful acceptance in response to the offer by the other party. The adjective lawful implies that the offer and acceptance must conform to the rules down in the contract Law.
Intention to create a legal relation
This principle is considered to be the first and foremost principle of making a formal and valid contract between the two potential parties of a contract. Bothe the parties of the contract agreement should have a clear conscious intention to make valid contract with the other party of the contract agreement (Atiyah, 2000).
There must be a lawful consideration to the contract. The consideration upon which the two parties of the contract agreement agree to make a valid contract must be lawful and the violation of this principle may make a contract to be illegal.
Capacity of the parties
The parties of the contract must be capable of creating a legal relationship between them (Atiyah, 2000). Both the persons and the parties must be physically, mentally and legally fit for the creation of the contract.
Both the parties of the contract will be consent to create the contract agreement free of any coercion or any other kinds of mental or physical pressure.
Legality of the object
The object of the contract agreement should be legal.
All the terms and conditions of the contract should be certain as much as possible.