Student I.D -5130354
Edexcel registration no -FF68248
Academic Term September 2013 - December 2013
Task 1 - Literature Review
P1. Explain the impotance of the offer and accptance for the formation of a valid contract.
A contract is an agreement that is enforceable by law. Modern business could not exist without such contracts. Most business transactions involve commitments to furnish goods, services, or real property; these commitments are usually in the form of contracts.
Use of the contract in business affairs ensures, to some extent, the performance of an agreement, for a party that breaks a contract may be sued in court for the damages caused by the breach. Sometimes, however, a party that breaks a contract may be persuaded to make an out-of-court settlement, thus saving the expense of legal proceedings.
A contract arises when an offer to make a contract is accepted. An offer contains a promise (for example, "I will pay ÃÂ£1,000") and a request for something in return (a person's car).
The acceptance consists of an assent by the party to whom the offer is made, showing that the person agrees to the terms offered. The offer may be terminated in a number of ways. For example, the party making the offer may cancel it (a revocation), or the party to whom the offer is made may reject it. When the party to whom the offer is made responds with a different offer, called a counteroffer, the original offer is terminated. Then the counter offer may be accepted by the party making the original offer.
REQUIREMENTS OF A VALID CONTRACT
For a contract to be valid, both parties must give their assent. They must act in such a way that the other people involved believe their intention is to make a contract. Thus a...