Slide 1: What is a valid contract?
A contract is defined as an ‘enforceable agreement made between two or more parties’. This can be either to do or to refrain from doing something. A contract is legally binding and if the terms of a contract are not followed then the party breaching contract terms can be prosecuted. A valid contract must include the following:
Intention to create legal relations:
An offer: This is a promise that is intended to be followed by either an offeror or the offeree.
Acceptance: This is the formal agreement to accept an offer from an offeror.
Consideration: The value attached to the promises made on a contract
Capacity: This is where the party has legal power to enter into a contract.
Contracts can be made in two different forms. A contract can be given in written or verbal form. A written contract is where the terms of a contract are included in a written document that is signed and dated by two parties. Written contracts are the most common type of contracts offered. A verbal contract is where two parties agree through spoken word. This is still a legally binding contract, however it is generally done when both parties are familiar with each-other and know each-other well.
Slide 2: Standard form contracts
A standard form contract is a contract made between two parties using their standard set of terms. A company will often use their own standard form contract. These often include custom made-offers and acceptances that fit business needs. There are however both advantages and disadvantages for these types of contracts:
Standard form contracts reduce cost
Standard form contracts reduce the need for individual negotiation.
Regular parties who are contracted on a regular basis will become familiar with their rights and obligations
Standard form contracts can often appear one-sided as one of the parties may have a stronger bargaining power
The business may stop negotiating individual...