The Four Elements of a Valid Contract
International Legal and Ethical Issues
Lanettee Ludy
BUS 310-1103A-05
Unit 3 IP
August 4, 2011
Abstract
This assignment will give a brief insight into the four elements of a valid contract as well as the objective theory of contracts. It will also explain how the objective theory of a contract applies to this case. I will try to explain why the court held that there was not a valid agreement between the company and the Seattle man.
The four elements of a valid contract Contracts are used in today’s world as a major part of interaction between individuals or companies and consumers. Contracts are often used within our professional and personal lives; they allow business and individuals the ability to sell, purchase, or transfer services, property, and other rights (AIU Online, 2011). Such as the selling or purchasing of a vehicle or home, marriage or divorce, a conglomerate employs another firm or agency to perform a job for them like adverting for example. When determining the legitimacy of a contract, one should ask was an offer made, was the offer worth considering or considered, and was it accepted (Contract Law, n.d.)? There are four elements to a valid contract, the first is called an agreement this is where an offer is made. An agreement is usually made between at least two parties. These parties can be a company and one person, two companies, or two people. The second is consideration this is where both parties consider to do or refrain from doing some form of lawful act. It is also the exchange of money between the two entities within the agreement for service or goods. As many know in the business world there are other methods of consideration. The third is lawful object this means that the parties must be legally capable of entering into a contract. Meaning the parties must be of legal age, have an understanding of what the details outlines within the contract are. The fourth is contractual capacity. Contractual capacity is where the
Lanettee Ludy
BUS 310-1103A-05
Unit 3 IP
August 4, 2011
Abstract
This assignment will give a brief insight into the four elements of a valid contract as well as the objective theory of contracts. It will also explain how the objective theory of a contract applies to this case. I will try to explain why the court held that there was not a valid agreement between the company and the Seattle man.
The four elements of a valid contract Contracts are used in today’s world as a major part of interaction between individuals or companies and consumers. Contracts are often used within our professional and personal lives; they allow business and individuals the ability to sell, purchase, or transfer services, property, and other rights (AIU Online, 2011). Such as the selling or purchasing of a vehicle or home, marriage or divorce, a conglomerate employs another firm or agency to perform a job for them like adverting for example. When determining the legitimacy of a contract, one should ask was an offer made, was the offer worth considering or considered, and was it accepted (Contract Law, n.d.)? There are four elements to a valid contract, the first is called an agreement this is where an offer is made. An agreement is usually made between at least two parties. These parties can be a company and one person, two companies, or two people. The second is consideration this is where both parties consider to do or refrain from doing some form of lawful act. It is also the exchange of money between the two entities within the agreement for service or goods. As many know in the business world there are other methods of consideration. The third is lawful object this means that the parties must be legally capable of entering into a contract. Meaning the parties must be of legal age, have an understanding of what the details outlines within the contract are. The fourth is contractual capacity. Contractual capacity is where the
References: AIU Online (2011). BUSN310: Unit 3 course material: Rights and obligations. Retrieved August 4, 2011 from https://mycampus.aiu-online.com/pages/MainFrame.aspx?ContentFrame=/Default.aspx (n.d.). Contract Law and Commercial Code Retrieved August 4, 2011 from http://www.otto-graph.com/samples/3/contractlaw.html LaMance, K. (1999-2011). Unilateral Contracts: Are Advertisements Unilateral Contract? Retrieved August 7, 2011 from http://www.legalmatch.com/law-library/article/unilateral-contracts.html