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Assignment (Sp22-Bba-005)

Consumer

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40 views3 pages

Assignment (Sp22-Bba-005)

Consumer

Uploaded by

fsgkbkb6hb
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ASSIGNMENT # 0

Business Law

Muhammad Ali SP22-BBA-005

SUBMITTED TO:
DR USMAN SHOUKAT

DATE
TH
07 OCT 2024

DEPARTMENT OF MANAGEMENT SCIENCES


COMSATS UNIVERSITY ISLAMABAD WAH CAMPUS
What are the essential of valid contract ?

The essentials of a valid contract generally include the following elements


1.Offer and Acceptance: One party must make an offer, and the other party must
accept it. Both offer and acceptance must be clear and Example: If Person A offers to
sell their car to Person B for $5,000, and Person B agrees to the offer, this creates an
offer and acceptance. If Person B makes a counteroffer of $4,500, the original offer is
no longer valid, and the roles are reversed.• Invalid Example: If Person A offers to
sell their car but Person B never responds, there is no acceptance, so no contract is
formed.

2.Intention to Create Legal Relations: The parties must intend to form a legally
binding agreement. Social or domestic agreements typically do not have this intention,
whereas business agreements usually do.

Example: A business deal between two companies to provide software services in


exchange for payment has a clear intention to create legal relations.• Invalid
Example: Two friends agreeing to go out for dinner, even if there is a discussion of
who will pay, does not typically create legal obligations. It’s a social agreement
without legal consequences
.
3.Consideration: There must be something of value exchanged between the parties
(money, services, goods, etc.). Consideration is what each party brings to the contract.

Example: Person A agrees to sell their phone to Person B for $200. Person B pays
$200 (consideration from B) and Person A transfers the phone (consideration from A).
Both parties offer something of value.• Invalid Example: If Person A gifts a phone to
Person B without expecting anything in return, there is no consideration, so it’s not a
contract, just a gift

4.Capacity: The parties entering into the contract must have the legal ability to do so,
meaning they must be of sound mind, not minors, and not otherwise disqualified.

Example: A 30-year-old person of sound mind buys a house, which is a valid contract
since they have the legal capacity.• Invalid Example: A contract with a minor
(under 18 in most places) to sell a house is not valid, as the minor lacks the legal
capacity to enter into such an agreement
.
5.Free Consent: The agreement must be entered into without coercion, undue
influence, fraud, misrepresentation, or mistake. Consent must be genuine and
voluntary.

Example: Person A sells their business to Person B after careful negotiation, and both
agree to the terms voluntarily. This shows free consent.• Invalid Example: If Person
A is forced to sell their business to Person B under threat, the contract is voidable
because there was no free consent (coercion).
6.Lawful Object: The purpose of the contract must be legal. A contract with an
unlawful objective or one that violates public policy is void.

Example: A contract to buy and sell office furniture is lawful and valid.• Invalid
Example: A contract between two people to distribute illegal drugs is void because
the object of the contract is unlawful
.
7.Certainty: The terms of the contract must be clear and specific. Uncertain or vague
terms can lead to the contract being unenforceable.

Example: A contract for a company to deliver 500 laptops to a school at $500 per unit
with clear payment and delivery terms is valid because the terms are certain.• Invalid
Example: A contract stating that “Person A will sell some laptops to Person B at a
reasonable price” is vague and may be invalid due to the uncertainty of terms

8.Possibility of Performance: The contract must be capable of being performed. An


agreement to do something impossible is void.

Example: A contract for a contractor to build a house in 6 months is valid because it is


possible to perform.• Invalid Example: A contract for Person A to bring someone
back from the dead would be void, as it’s impossible to perform
.
9.Formalities: Some contracts, by law, must be in writing and signed (e.g., contracts
for the sale of land), while others can be oral.
If any of these elements are missing, the contract may be considered invalid or
unenforceable.

Example: A contract to sell land must typically be in writing, signed by both parties,
and possibly notarized. If these formalities are followed, the contract is valid.• Invalid
Example: An oral agreement to sell land without any written document may be
invalid, depending on the laws that require real estate transactions to be in writing

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