Elements of a Contract Assignment Example | Topics and Well Written Essays - 1000 words

Elements of a Contract - Assignment Example Ball parks are not included in an offer. It does not request for proposals of a letter of intent. Indicating general intent to launch into a contract and inviting persons, to give their offers is what constitutes an invitation to treat. An offer goes beyond mere display of intent. For instance, displaying cars in a motor vehicle shop together with their prices does not constitute an offer waiting for interested customers to walk in and accept the offer. Rather, it becomes an offer when a customer comes and selects the car of the price they want and goes to pay for it. The motor vehicle seller will then decide to, either accept the offer, or not. A contract that has a high value has a longer time of offer (Blum, 2007). Acceptance Acceptance is an expression by the person who receives the offer that they have accepted it. Acceptance needs to be an absolute and unconditional agreement that a person will abide by the terms spelt out in the offer(Drake, 2007). The person who gave the offe r needs to see to it that the person receiving it has understood it well. It ought to come before the expiry of the period of offer. Otherwise, acceptance can only be valid after the given time of offer has lapsed if the one giving the offer renews that period. Where the time of the offer has been stated as ‘reasonable’, usually, the circumstances of such a case will define what is reasonable. If there are conditions attached to the acceptance or the terms of the offer changes, the involved parties are negotiating. Legal consideration Consideration is needed in order to make the contract valid. Parties exchange promises or make an act as to the agreement. Consideration is what makes such an arrangement binding. Consideration denotes some form of benefit to the one who is making the offer and a corresponding cost to the one accepting the offer. It could be monetary, some form of right or interest. The parties agree on how much consideration is adequate. This consideratio n needs to be something valuable. Such an agreement is subject to the courts deciding whether to enforce it, especially with regard to the adequacy of the consideration(Helewitz, 2007). A past promise cannot be a consideration. It is must either a new promise or benefit in exchange of the offer. Capacity A valid contract is between competent parties. Legal capacity is defined by several factors. There are people who are not free to enter into a valid contract, and their consent is treated specially. People who have mental impairment may not understand the terms of a contract. Legal capacity of mentally impaired people will largely depend on whether there is a genuine consent. Since consent depends on an individual’s understanding of a contract, the complexity or simplicity of a contract matters(Burton, 2009). Courts may have to come in if it is established that the individual who was making the offer knew of the disability of the contracted person and was out to take advantag e of them. The contract can also be suspended if the benefit that the second party received has not been sold to another that was not involved in the contract. If it had been sold, the third party is informed of the possible outcomes so as not to be bound by the contract. There are some people with mental impairments who are assisted by administrators that are legally appointed for them. Such people cannot enter contracts freely