...A contract can become a very important and essential part of any agreement between people. “A contract is a legally enforceable agreement that is created when two or more competent parties agree to perform or to avoid performing, certain acts that they have a legal right to do and that meet certain legal requirements”. (Anthony L. Liuzzo, 2010) Capacity means that “in the law sense, denotes some ability, power, qualification or competency of persons, natural or artificial, for the performance of civil acts, depending on their state or condition, as defined or fixed by law; as the capacity to devise, to bequeath, to grant or convey lands; or to take and hold lands, to make a contract and the like”. (The 'Lectric Law Library, 2011) The capacity matters when a contract is going to be written. It can become crucial to know the ability of the other party involved in the contract, this way you have a better understanding of how the agreement will function in the future. The wide-ranging belief of the law is that all individuals have a capacity to contract. A person who is trying to escape a contract would have to plead his or her lack of capacity to contract against the party who is trying to enforce the contract. For example, he would have to prove that he was a minor, adjudged incompetent or drunk or drugged, and so forth. Often this is the most difficult burdens of proof to overcome due to the presumption of one's ability to contract. “In most states, the standard for mental...
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...legally binding agreements, certain people are always considered to lack the legal ability (or "capacity") to contract. As a legal matter, basically they are presumed not to know what they're doing. These people--legal minors and the mentally ill, for example--are placed into a special category. If they enter into a contract, the agreement is considered "voidable" by them (as the person who lacked capacity to enter the agreement in the first place). Voidable means that the person who lacked capacity to enter the contact can either end the contract or permit it to go ahead as agreed on. This protects the party who lacks capacity from being forced to go through with a deal that takes advantage of his or her lack of savvy. Let's look at some situations in which a person might lack the legal capacity to enter into a legally binding contract. Minors Have No Capacity to Contract Minors (those under the age of 18, in most states) lack the capacity to make a contract. So a minor who signs a contract can either honor the deal or void the contract. There are a few exceptions, however. For example, in most states, a minor cannot void a contract for necessities like food, clothing, and lodging. Also, a minor can void a contract for lack of capacity only while still under the age of majority. In most states, if a minor turns 18 and hasn't done anything to void the contract, then the contract can no longer be...
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...000. The car has now been delivered but she is unable to pay for it. Discuss. First of all, the Law of Contract has been defined as an agreement which is legally binding between the both of parties. A contract simply means an agreement between the parties however the agreement has some important element within as it alone does not stand to have a binding contract. In a contract, there should have all the elements as proposed which will be offer, acceptance of offer, consideration, intentions to create legal relations, capacity, consent, legality and possibility of performance. In this particular situation, the element of capacity is lacking in this contract. Capacity to a contract defines us that parties in a contract must have the capacity to make a contract. In a simpler way, capacity is referred as legal ability to enter into a contract and the law generally states that everyone has the capacity to a contract except for certain circumstances which will be discussed in the following paragraph. Phing is 17 and underage, which makes her legally ‘incapable of capacity’ due to her minor status, and therefore any contracts made by Phing would be void ab initio except for certain exceptions, such as contracts for necessaries, scholarship contracts and insurance contracts. Section 11 of the Contracts Act 1950 is about contracts entered into by those who have no capacity. This section states that a person must satisfy the age of majority according to the Section 2 of the Age...
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...“Contracts made by minors are void”. Explain this statement and discuss its exceptions. Contracts entered into by a minor, one below the age at which state law deems persons to possess capacity to contract, currently 18 years old in most states are generally voidable by the minor-party, even if he misrepresented his age. A minor can furthermore avoid contractual obligations for a reasonable time after attaining the age of majority. However, if he fails to disaffirm within a reasonable time, the contract will become binding against him. Disaffirmance: Disaffirmance is a contractual obligation, setting aside, or a legal avoidance. For a minor to disaffirm, he or she must declare in words or in oneself, a reason not to be destined in to an agreement of a contract. They must stop the whole agreement, not just a small part of it. Minors must return all of the products that they have, not just the ones they do not want. If there, is a third party (adult) involved and have some of the products, the minor can ask for it back to return it to where he or she bought it. Once a minor reaches, the age of maturity, the court will give them two months or in some states one year to disaffirm. If the minor refuses to disaffirm, the courts will ratified it. Ratification is the act of accepting and giving legal force to an obligation that previously was not enforceable. If an adult is in this court case, they will have to be bound to it and pay. In...
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...to understand what the meaning of the term contract is and what and what the requirements are for the formation and dissolution of one. A contract is an agreement between at least two parties giving rise to legal obligations within the limits of the law. The rights and obligations arising from a contract entitle parties involved to receive and demand performance and actions are enforceable by law. Rights and duties are created by the formation of contracts- a right is an advantage entitling the holder to demand that another person should act or refrain from acting. A duty- is a responsibility imposed by law and obliges a person to act or refrain from performing. There are different types of contracts in our legal system which have certain special elements and legal requirements. One of these elements being the capacity to act by each party; which means that the parties involved in the contract must be legally capable of performing the particular act which gives rise to the formation of the contract. According to South African law every legal subject , irrespective of whether he or she is a natural person or a juristic person legally has the capacity to be the bearer of rights and duties, it’s important to note that not every person who has legal capacity has capacity to act. According to (Havenga ,2007:p71) Capacity to act refers to the capacity to perform juristic acts, to participate in legal dealings and to conclude valid contracts, it then becomes clear that only natural...
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...INTRODUCTION The contract law principles in Shariah Law are not different from English contract law principles. In English law, ‘contract is an agreement enforceable by law’. According to Islamic law, a promise may not be legally enforced although it is strongly recommended by religious and moral values to be fulfilled.[1] In Islamic law, contract is known as ‘aqd’ which means tie or bond. It means a contract binds the parties together. From the definition, the term ‘aqad is more or less of the equivalent of the technical term of contract in Western Jurisprudence. However, ‘aqad does not necessarily involve agreement (which is a necessary element in a conventional contract) because the term is also used to describe a unilateral juridical act which is binding and effective without the consent of the other party. Islam emphasizes on fulfilling contractual obligations. Allah says in the Quran, “O ye who believe, fulfil all of your obligations”[2] and also similarly in this surah which is stated “…So fulfil your engagement with them to the end of their term, for Allah loves the righteous”[3] Under Islamic law, to be a valid contract, there must have some elements in the contract. Those elements are sighah (ijab and qabul), contracting parties and subject matter. The first element is sighah (ijab and qabul) or offer and acceptance. There are three kinds of offer which are verbal offer (kalam), offer by conduct (‘amal’) and offer in writing...
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...European Business Law 1! ! Introduction to international business law and elements of contract formation! ! ! ! ! Useful for :! • Business relationships depend upon legally binding agreements! • Being aware of contract traps (avoid business troubles)! Law > Contract Law > French contract Law > International Contract Law (comparative law / Unidroit principles / Vienna Convention) > Common Law ! What is a contract law?! 3 main ideas = A contract is act of Freedom / of Willingness / of Foreseeability! 2 main principles = Principle of obligatory force / of good faith! Problems when negotiating a contract :! Is the negotiator empowered?! Severability or not?! Confidentiality or Non-disclosure agreement! ! A Contract is an agreement between 2 or more parties that is binding in law! ! When does a contract come into force? => Agreement on essential terms! ! BEFORE : Elements of contract formation! ! Offer and Acceptance ! ! ! An offer accepted is a contract / A statement of willingness to contract on specified terms! • Express / implied offer! • Adressed to one particular person, a group of persons, or the world at large! • Offer and Invitation difference to treat (= advertising)! Revocation of an offer : ! • Withdrawal of the offer : An offer may be withdrawn at anytime before acceptance! • Lapse of time :! • Where a time-limit : the offer automatically falls on the expiry of that time-limit! • Where no time-limit : An offer only remains open for a reasonable time! • Rejection...
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...question 3.5 Page 12- referance Question 1 A minor or referred to as a child is any natural person which is any human being under the age of 18 years, this used to be till the age of 21 but has change to the child act38 of 2005. Minor under the age of 7 have no capacity to act this means that they cannot enter into any form of agreement of contract, because a minor under the age of 7 has an inadequate level of development which allows the minor to form sound judgement of contractual obligations, a minor under the age of 7 years cannot even accept an offer of a donation, guardian must act for the child (Peter Havenga, 2010) (Anon., 2014), Mthuli is 6 years old therefor she has no capacity to act an cannot enter into any contract or agreement. A minor over the age of 7 and under the age of 18 year, is capable of the mind they have understanding but no judgement and have limited capacity to act, this means that a minor over the age of 7 and under the age of 18 year have limited capacity to enter into a contracts to because he or she may normally perform juristic act only with the assistance of a guardian with full capacity to act (Peter Havenga, 2010). The children’s act implement that a guardian or parent must help or represent the child in administrative, contractual and other legal matters, also provides that the guardian of a minor must safeguard the minors property and property interest, if there are more than one person who...
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...TOPIC 4: INTRODUCTION TO CONTRACT LAW — ESSENTIAL ELEMENTS OF A CONTRACT — STEPS 3, 4 AND 5 Please remember to check your Bulletin Board. • Chapters 5 and 6 of Turner. • Chapters 5 and 6 of Gibson (optional). Learning objectives After you have completed the readings for this topic you should be able to: > define consideration and be able to identify when it is present; > explain and apply the legal principles relating to consideration; > explain the difference between past, executed and executory consideration; > explain and apply the doctrine of promissory estoppel; > identify contracts which must be in writing; > recognise the classes of persons who have limited contractual capacity and describe the effect that each has on simple contract; > outline the common law rules regarding contracts entered into by infants and which can be valid, voidable or void; > summarise statutory changes to the common law made in NSW and SA in relation to infants; and > outline the common law rules with regard to capacity to contract with respect to corporations and bankrupts, the mentally ill and those under the influence of alcohol. Graduate School of Business 4:2 Step 3: Consideration Consideration is something for something. Put another way, it is the price the promisee pays for the promise. For example, in the case of the purchase of a house, it is that house in exchange for the purchase price. Consideration makes the agreement in a commercial bargain. A person...
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...Elements of a Contract By Michael A. Petrat Business Law 206 Most people in our society are involved in contractual agreements of some kind. In most, if not all, aspects of law contracts can be found. Contracts are involved in family law, corporate law, employment law, litigation and real estate. Elements of a Contract: A contract is an agreement reached after sufficient consideration to do, or refrain from doing, some legal action. A contract is considered valid when two or more parties with capacity make an agreement involving valid consideration to do or to refrain from doing some lawful act. If these elements exist, the contract is valid. If one or more or these necessary elements is missing, the contract is void or voidable. In other words, it is not a true contract and therefore cannot be enforced. A void contract is no contract at all. It is not binding and no action can be maintained if it is breached. A disaffirmed is not necessary to avoid a void contract. If a contract can be rejected by one of the parties on legal grounds, it is called a voidable contract. A voidable contract is valid and binding unless the entitled party (the party who has legal grounds to reject the contract) voids it. A defect exists. The defect may be cured by ratification of the entitled party. The three basic components of a contract are the offer, the consideration and the acceptance. The following are six elements that are to help to determine whether or not the basic components...
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...There are five necessary components to make a contractual agreement, an offer, and acceptance of the offer, the intention to enter into a legally binding agreement, consideration and capacity to contract. If any of the five elements are missing from any contract, then it is either void or voidable. Rules of intention to enter into a legally binding agreement, and consideration are two elements which need to be apparent before a contract will be seen as legitimate in front of the law. Consideration is the idea of value in law. It can be a promised action or the omission of an action that the parties to a contract agree upon. Consideration can take the form of money, physical objects, or a forbearance of action. In this example, EC sells the stove and the stereo for Rp 20 million. The consideration from EC is the stove and the stereo and the consideration from Gabriela is the Rp 20 million which is on credit. Consideration alone is not enough to create a legally binding contract; the parties must also have the intention to create legal relations. Rules of intention refer to the final element necessary for a contract. This intention to enter into a legally binding agreement needs to be established because when contracting parties don't consent to the legally binding relationship the contract is not enforceable. Often, the intention to create legal relations is expressly stated by the contracting parties. In other situations, the law will readily imply the intention, because of...
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...KULLIYYAH OF ECONOMICS AND MANAGEMENT SCIENCES ‘Comparison of Principles of Sale Contract between Conventional and Shari’ah Laws’ LAW 3512 COMMERCIAL LAWS (SECTION 3) Any form of cheating or attempt to cheat is a serious Offence which may lead to dismissal Introduction We are blessed as a human being on the earth as the only creature created by God who has the ability to think upon choosing between alternatives. Humans are associates with many labels and beliefs that they uphold throughout their life. Major differences of choosing between alternatives would be based on their framework of thinking mostly derive from their religions or beliefs. Speaking from Malaysia context, Islamic belief would be a stronger influence for Malaysian citizens before embarking into any decision. Although, Malaysia is known as the Islamic state but Malaysia still uphold conventional laws as the supreme laws for the state over Islamic Laws which ruled by the Federal Court. Islamic Laws would only covers family laws, inheritance and few specific issues among muslims[1]. We would further discuss on the framework of sale contract from Islamic and conventional point of view. Take a look around and it is apparent in our daily lives that transactions need to occur for us to carry on sustaining our needs and wants. As humans we ought to want things and we need to have goods that are essential for our daily lives in order to carry on living our lives...
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...Elements of a Contract BUS 670 August 25, 2015 Elements of a Contract Introduction A contract is a legal agreement between two entities that creates obligations by both parties that are enforceable by law. As Verkerke (2015) notes, individuals are often ill-informed of the legality of most common dealings in their lives. With a common ignorance of legal matters, it is essential that contracts contain the required elements to be legally binding and protect both parties involved. Additionally, it is pertinent to understand the difference between contracts governed by common law and those governed by the Uniformed Commercial Code (UCC). Finally, prior to signing a non-compete agreement or asking someone to, it is important to understand the circumstances that make it enforceable as well as the diversity of enforcement standards as they vary from state to state. Five Elements Required for Enforcement Every contract contains promises that are enforceable, however only certain conditions are enforceable by a court if they meet the following five elements: an offer, an acceptance, consideration, capacity, and legality (Seaquist, 2012). The first element, the offer, occurs between two parties, the offeror (the one who makes the offer) and the offeree (the one who has the option to accept the offer) which grants the offeree the power of acceptance (Seaquist, 2012). Although some preliminary negotiations may take place before the final acceptance of the offer, they are...
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...7/01/13 Business Contracts: Protocol, Laws & Ethicality There are various kinds of contracts which arise within our business world today; contracts are an essential component to business livelihood. Although a contract is an agreement, not all agreements are valid contractual obligations. In order for any contract to be an official and legally binding agreement, there are essential requirements which must first be fulfilled. Because contracts are vital to the organization and its success, it is important that the organization has an inclusive understanding of the inner workings of business contract and law and sustaining ethicality within these agreements; this will help ensure that each and every business transaction is a smooth and successful endeavor from beginning to end. What is a contract, and what makes it valid? According to Essentials of Business Law, by Susan Rogers (2012), a contract is described as being “a legally enforceable agreement between two or more people.” Therefore, a contract emerges from the voluntary consent of two or more people with mutual accordance to enter into this agreement. Contracts are helpful to business, as these agreements are binding to both parties involved. In order for a contract to be a valid and binding agreement there are five fundamental yet essential elements that must be present, and these are: 1. The Offer, 2. The Acceptance, 3. Consideration, 4. Legality, last but not least, 5. Capacity, (S. Rogers 2012). ...
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...This issue is governed under the Law of Contract, under the formation of contract and the revocation of a contract specifically under contractual capacity. Contractual capacity states that young persons aged sixteen and seventeen have full legal capacity. This protects young persons against ‘prejudicial transactions’ until they turn 18 and any contracts like this can be put aside by the court. However, there are exceptions to the rule: if under 18 and running your own business; if ratified before turning 18; if age is misrepresented when entering contract. In this case, Jean is seventeen, running her own business and wants to get out of a legally bounding contract for an object in which has already been ordered. However, Jean cannot get out of the contract just because she is under eighteen years of age because she is running her own business and therefore she is not subject to the protection anymore. Therefore, this puts her in the same legal position that any other adult would be in, in her situation. She could attempt to revoke the offer by emailing or writing to the seller but she is still legally bound by the contract made. Q2) This issue is governed under the Law of Contract, under the formation of contract and specifically contractual capacity. Contractual capacity states that generally children under sixteen years of age have no capacity and the contract is void. However, the exception to this rule that would make the contract valid; if transaction is commonly entered...
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