Essays on Assignment 2--Foundations Of Business Law Assignment

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XxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxLecturerXxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx18th April, 2012.Contract LawA 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 criterions. 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 the 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 was 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 which 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 to include a consideration on the same (Lambiris, 2011). Consequently, the contract’s formality is evident in its form. The first element of determination is the legality if the offer. An offer is anything that expresses the willingness of the offeror to enter into a legally binding contract with the offeree. Often, people mistake an offer with an invitation to treat. This is because of the essential elements of a valid offer which distinguishes an offer from an invitation to treat.

On the other hand, an invitation to treat is anything that is subjected to instilling awareness that will lead to one making an offer (Turner, 2010). Therefore, an offer must be very clear and precise or else it will be assumed an invitation to treat. An invitation to treat does not lead to a contract not unless an offer is consequently made. It includes advertisements and displays and is characterized by declaration of intention or the supply of information which cannot be regarded as an offer but rather as an invitation to treat.

In regard to the relationship between Sportswear World Ltd and Hi Q Manufacturers, the earlier is the offeror or intended offeror in reference of the facts of the case. The document prepared by Sportswear World Ltd amounts to an offer to buy 100 cartons of swimwear from Hi Q Manufacturer Ltd.

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