Elements of Contract between Woohoo Wholesale & Provident Solutions
The use of contracts can serve to be an imperative aspect in the negotiation process between parties who intend to create legal relations. Without the use of formal contracts, differing levels of ambiguity can occur between parties in regards to issues surrounding what promises/offers exist between the parties and what could be the possible consequences in cases where one or more of the parties fail to fulfil the terms agreed between them.
A level of ambiguity appears to have arisen in the example given in the case study regarding Woohoo Wholesale (WW) and Provident Solutions (PS). This Essay services to investigate whether or not all of the necessary elements for a legal contract to be valid were in place.
Firstly, in order for a contract to be legally binding, there are six elements that must exist. * An offer: A promise to do or not to do something proposed involving clear terms and finality. An offer is nullified if the offeree makes a counteroffer to the offerer. * Acceptance of the offer: The offeree must display absolute acceptance of the offer through written/verbal agreement or in their conduct. Silence does not constitute acceptance. * Consideration: There must be an exchange between the parties, involving a promise for a promise or a promise for performance flowing from the offeree to the offerer and the promise/performance must hold value. * Intention to create legal relations: This presumption can be rebutted with the onus being on the party who wishes to deny intent to create legal relations proving so through the relevant legal channels. * Certainty of Terms: Potentially the area where the most ambiguity may occur. Courts will not enforce vague or incomplete agreements and may press to clear uncertainty. * Capacity to Contract: For example, contracts involving