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Greetings beautiful steemians and welcome to my wednesday educational post based on the theme Business Law. I am a second year business student in the Higher Institute of Commerce and Management of the University of Bamenda and to my knowledge, I will give you guys some tips about business law.
When the law is involved in business, we must always talk about contracts.
CONTRACT.
A contract refers an agreement between two or more persons that is enforced and recognised by the law and can give rise to obligations. A contract can be made verbally or written. That is a contract can be informal (oral) or formal(written).
When a contract is performed, there are two parties; the offeror and the acceptor. The offeror refers to the party which proposes to enter into a contract. While the acceptor refers to the party who agrees to the proposal given by the offeror.
Elements of a contract.
For a contract to be considered as valid and enforceable by the law, there must be 3 elements that must be present in the contract. These elements are; agreement(offer, acceptance), contractual intention, consideration.
1. i. Offer.
An offer refers to the expression of the willingness to enter into a contract based on specified terms and that is meant to be legally binding in case of acceptance by the person to whom the contract is addressed.
ii. Acceptance.
Acceptance refers to the final expression of assent to the terms stated in an offer. Acceptance is legally binding only when it is communicated to the offeror of the contract.
When communication is made to the offeror but with attempts to change the terms of the offer, this is no longer acceptance, but a counter offer.
Once an offer is made and the terms are agreed by the offeree, there is agreement between the both parties but this is just part which is necessary for a legally binding contract.
2. Consideration.
Consideration refers to anything which is given as a promise in order to make the promise enforceable by the law.
For example, a buyer gives payment for goods which are promised to be delivered by the seller. The payment given is known as consideration for the promise of goods.
3. Contractual Intention.
This means that, for the contract to be considered as valid, the both parties must intend their agreement to be legally binding and enforceable by the law.
Terms of a contract.
Contracts may be expressed or set out in several terms or different methods. A contract can be expressed in 2 two terms.
Express terms.
Express terms refer to the terms of the contract which the parties set out in their agreement. This means that such terms were given in the offer, and then accepted by the offeree which makes an agreement. These specified terms may be written down on a document that binds the contract.
Implied terms.
Implied terms refer to those terms that are not expressly given in the contract but are intended to be included and legally binding. There are several instances of implied terms as follows.
- Terms implied in fact. For the court to test out such terms, they will use 2 methods; "The officious bystander" and the "business efficacy". The officious bystander is binding if a third could be asked if a certain term is implied or obvious, he will respond as "Oh, Of course."
While the business efficacy is binding is certain conditions are respected as normal in carrying out the business. - Terms implied by law. These are the terms which are already stated within the law governing that business such as Sale of Goods act 1979.
- Terms implied by custom or usage. These are terms that are implied by the customs of the trade, or the locality.
Who are those who don't have contractual capabilities?
1. Minors.
A minor in my country of Cameroon which is anyone below 18 years old. But a minor can contract if it is a contract of necessity such as health, clothing, food, shelter etc.
2. Mental incapacity or disability.
Individuals who are mentally disabled or have issues with their brain which renders them incapacitated, cannot enter into contracts. Such individuals can include people with dementia, mentally insane etc.
3. Intoxication.
Any individual who is currently intoxicated by substances such as alcohol, drugs etc, does not have any legal rights to enter into a contract. Any contract which is made within the period of intoxication is considered null and void.
Incidents that can cause a termination of a contract.
A contract will be terminated in the cases of the of the following points.
- If the both parties agree to terminate the contract.
- If there is a breach of the contract by any of the parties.
- If the performance of the contract is over.
- If the contract was formed under circumstances of fraud, misinterpretation or mistake.
- If any of the parties find it impossible to fulfill their obligations to the contract.
- If a law is passed after the contract's birth that renders the contract illegal.
Well, that will be all for today as concerns the basics of contracts. Thank you for reading and please leave comments on your thoughts.
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