A valid contract has several elements which include; proposal and approval, consideration, the capacity of the two or more parties involved to contract, free consent, no agreement should be declared to be void, writing and registration should be done if the so demands, legal leadership, certainty, possibility and performance and enforcement by law (Musacin, 2009).
Proposal and approval involves one party signaling the intent to do or not do a given act or deed. This is said to be a proposal. The second party if interested will accept the proposal making the proposal a promise. Consideration comes about when the parties that involved does or abstains from doing what was agreed upon as a result of the agreement that was made. Every contract must have a promise and consideration. On the other hand the capacity of parties to make contract involves all the parties involved being competent and having attained the age of majority. The people involved should have sound mind and should not have been disqualified from making contracts by the law. On the other hand consent involves giving agreeing to the contract without any coercion, mistake, misrepresentation and undue influence. Meanwhile, void agreements are agreements that are enforceable by the law and thus a contract must be enforceable by law. Registration on the other hand may be required by law to make them secure and thus will be easily enforceable by law. Legal leadership basically involves creation of legal relationships while certainty involves the terms of the contract being clear (Musacin, 2009).
The objective theory of a contract
The contemporary legal concept holds that a binding agreement exists amid two or more partiers if a sensible being can judge from the apparent and objective acts of the parties involved and state of affairs that an offer has been made and accepted. This can be perceived fro the point of view of the subjective notion of intention of the involved parties which was advocate for by the subjective theory of a contract. This theory is very applicable in this case. Pepsi Company on made a joke but Leonard thought it was true the company was offering a plane. Given the price of the plane exceeded the offer that was being mad. And also there was no binding agreement between Leonard and the company.
Advertisements can not be considered to be offers since the intent of those who make them is to sale good and service. As such, the do not make an offer to buyers but coerce them or persuade them to buy the good or services. Advertisements generally differ from reward situation based on unilateral contracts since the reward in these circumstances is not promised
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