The paper "Foundations of Business Law - Contract and Negligence Tort" is a great example of a finance and accounting assignment. A contract is an agreement between two or more people with the intention to make it legally binding. However, the agreement must have a consideration to be complete (Davenport & Parker, 2011). There are three forms of contracts in reference to their validity; valid contract, voidable contract and a void contract. A legally binding valid contract must exhibit certain criteria. Offer plus acceptance can be said to be the framework of a valid contract but it must have some consideration regardless of whether it is sufficient or not.
Therefore a valid offer is the first essential element to a valid offer and consequently, a legal acceptance follows. A lawful consideration is a next element followed by the capacity to contract of the parties involved, a possibility of performance and intention to create a legal relationship (Gibson & Fraser, 2011). For a declaration to be made whether a legally binding contract existed between Sportswear World Ltd and Hi Q Manufacturer Ltd, the above essentials of a valid contract must be determined.
However, the essential elements of a contract may differ from one contract to another in reference to where the contract may be classified. Apart from valid, voidable and void contracts, there are implied and express contracts, contracts under seal, contracts of utmost good faith simple contracts and formal contracts (Turner, 2010). Sportswear World Ltd and Hi Q relationship were under express terms due to the presence of a document. In addition, the relationship exhibits an element of a formal contract in reference to the document still.
Although it is written and thus express, the relation exhibits some formal relationship that could lead to the consideration of a formal contract. A formal contract exists where there are writings in a special way and does not eventually include consideration on the same (Lambiris, 2011). Consequently, the contract’ s formality is evident in its form.
Davenport S & Parker D, 2011, Business and Law in Australia, Pyrmont NSW: Thomson Reuters.
Donaghue vs. Stevenson  AC 562
Gibson A & Fraser D 2011, Business Law, Frenchs Forest: Pearson.
Lambiris M, 2011, First Principles of Business Law, Victoria: The University of Melbourne.
Turner C, 2010, Australian Commercial Law, Sydney: Law Book Co.