Outline the elements required for the formation of a contract sample writing - Essay Prowess

Outline the elements required for the formation of a contract sample writing

Outline the elements required for the formation of a contract sample writing

  

 

Question 1

Outline the elements required for the formation of a contract

A contract is one of the most important legal concepts in this free society today because it is crucial in creating order within our social, economic and political landscapes. A contract is basically a legally binding agreement for which the breach or violation of the terms of agreement has remedies entrenched in law(Elliot & Quinn, 2017). As such, the law takes into consideration the manner in which the contract was drafted, the parties involved and the purpose for which the contract was drawn. For a contract to be valid, there are elements that need to be fulfilled. These includes:

  1. Mutual consent – for a contract to be valid, the parties concerned have to reach an agreement. A mutual consent is signified by an issuance of offer and followed by an acceptance of the offer(Elliot & Quinn, 2017). An offer demonstrates the willingness of the offeror to enter into an agreement with another party. The offer needs to be clearly communicated the terms of offer to the interested party. If the other party or the offeree is satisfied with the terms outlined in the offer, he/she demonstrate assent of the terms by issuing an acceptance to the offer. This should be done in a way that is acceptable to the offeror. Acceptance occurs when an offeree confirms an approval for the agreement. There should be acceptance by the offeree(Wilkinson et al., 2016). In case one party changed or corrupted the terms of the offer, a rejection is allowed and the action is termed as a counteroffer. There should be a mutual agreement in case either of the parties intends to make any changes in the offer.

When the offeree comprehensively reads though   the offer, he or she makes an acceptance once they are familiar with the rules and regulations as constituted in the contract.  Moreover, the individual extending the proposal should similarly need to listen to or read that the offeree is accepting the proposal.  Faye Fangei (2008) summarizes that usually, an obligatory commitment occurs only when the offering party acknowledges of the acceptance and the offeree is likewise apprises of it.  In this case, an offeree can accept an offer being made through signing  on the form or  orally by word of mouth.  His or her signature symbolizes an approval of the contract obligations, consequently binding him or her in the contract. In an employment contract,an employee signs the filled form as an indication that he or she has accepted the  terms offered in the contract.

No contract is approved when the involved parties are still negotiating and no acceptance has been made. Likewise, Poole (2016) clarifies that no contract is approved while any discussions are still underway. Mostly, communication is important   in the contract acceptance .Poole (2016) deliberates that   silence does not amount to an acceptance. However, an exception may arise where an offeree has   clearly stated that his or her silence should be regarded as an acceptance of the offer. If the offeror has not received a response from an offeree, he or she   definitely assumes that they have accepted the terms of the contract that binds the parties.

  1. Consideration – is a set of mutual promise between the two parties that have entered into a legally enforceable agreement. Without a set of mutual and valuable promise, the law may be unable to enforce the terms of agreement made between the two parties. A value consideration is determined by examining the price that one party paid for the what it received from the agreement. A promise by one party to pay a certain amount of money for a piece of land the other party offered, is seen as a valuable consideration. It is important to know that the promise must result in a legal detriment and not gratuitous promise which has no value attached to it and cannot be enforced by law(Elliot & Quinn, 2017).

The analysis of the court on if the contract has the support of sufficient consideration focuses largely on the performance of the offeree or promise than the offeror. The law through the court states that little consideration can be established unless if the offeror seems to undergo a legal detriment in giving the promise in return or performing the action that the offeror has requested.Generally, a legal detriment is established when the offeree renounces a legal right for the fulfillment of the contractual duties. Therefore, the promises related to making a donation or a gift and love and affection cannot be sufficient to be considered for a contract since none has a legal duty to refrain or give others. In the same manner, promises to undertake an act which has been completed already in the past does not give consideration for  new agreement.

  1. Legality – A contract is deemed to be legal if it was carried out in accordance with the law. The form in which a contact is entered, whether formal or informal, is validated if it was done in a way that is enforceable by laws. For the formation of a lawful contract, it is necessary for the parties to agree for a legal objective. Likewise, the contracting parties should intend that the contract be attached to legal obligations and consequences. The objective of the contract should not be immoral and opposed to the government policies as Gordon(2016) explains. Therefore, a house owner who knowingly rents a house to a prostitute to conduct prostitution cannot get back his money through a law court since prostitution is illegal. Also, when a intentionally settlesto sell trafficked items to B,  then the contract is unlawful hence void.Fried (2015) elaborates that  contract is considered void if it is formed illegally or it violates public protocol. For example, a contract involving the trade of banned drugs   in the country is considered void. Contracts lacking public interest may be worthless.

In a business whereby a firm charges their clients very  high rates of interests on loans could be considered invalid by the court of law.It is essential to have legal relations in valid contract. If the company advises him to also manufacture the drug, then the contract is void since it boosts violation of the state rules. Similarly, a contract   committing murder or actions of kidnapping is considered void and unlawful Appleman et al,. 2016). For example, if there is a contract made between an employer and an employee, and then there is an abrupt termination of work, the employee has to be compensated according to the legally agreed terms. However, social and domestic agreements that have no intention of creating legal relations may not be referred to as contracts.

  1. CapacityA person that gets into a contract has all the legal obligations and is responsible for the duties he/she chooses to undertake not unless he/she is mentally incapacitated, or the individual is a minor. In this case a minor would imply to the person that has not yet attained the age of 18 under the United Kingdom Jurisdiction. Moreover, a contract by a minor can be voidable at the discretion of the minor, which implies that it is enforceable and valid when some affirmative action is taken to refute the contract. Minors who refute their contracts cannot be liable at any point for breach. Legally minors are thought to be naïve, inexperienced and too immature to equally negotiate contracts with adults and therefore are protected by the law from being accountable for contracts unwisely entered.

When one of the parties does not understand the consequences and nature of an agreement he she enters, the law makes an assumption that the particular individual is mentally incapacitated to get into a contract that is binding. Conversely, until the court has formally adjudicated a contract, a party may not be relieved from undertaking any contractual duties. This is after evidence has been taken concerning the mental capacity of the party, where unless there is an existing order from the court which declares the party as insane or incompetent. Same case as in the minors, insane persons contracts` are voidable at his/her own discretion. Nonetheless, an agreement can be ratifies by a guardian and/or a personal representative and hence treat the agreement as a legally binding contract.

Contracts executed by persons who are under drugs and alcohol influence are also equally voidable at the individual`s discretion. Practically, courts do rarely have sympathy on defendants that try to void contractual duties while claiming that they were under intoxication. Conversely, if there is evidence which indicates that the party which was sober attempted to take advantage of the party which was intoxicated, there will typically be an intervention to void the contract. People, who because of prescription medication get intoxicated, are treated as insane or mentally incapacitated and thus relieved generally from contractual obligations (Gordon, 2016).

Question 3.

Explain the Build and design type of procurement and its disadvantages

The design and build approach to procurement is an arrangement where the client gives one organization the responsibility to design and build a project usually fixed price lumpsum. Such organizations usually integrate the design and construction aspects of the project in order to manage such design and build projects(Lesniak, et al., 2012). A team that is made up of architects, engineers, project managers, and builders collaborate and work together from the start and often communicating progress and challenges faced along the way to allow for creative solutions. The design and build approach can be implemented in three ways:

  • Pure design and build– It is an all-in-one approach where an organization has the capability and expertise to carry out all the design and construction activities required to sufficiently complete a project. Such an organization has a fully integrated the design and construction aspect of its projects
  • Integrated design and build-This approach is employed by organizations who have a team of designers and architects but occasionally hire external designers depending on the complexity of the project. As such, more effort is required in order for the team of internal and external members of the design and build team to collaborate and work together on the project.
  • Fragmented design and build – This the most commonly used approach to design and build where an organization takes a project but hires external design consultants to handle design tasks. The internal and external members of the team are coordinated by a project manager who has the responsibility of ensuring that client specifications are adhered to.

The design and build approach is usually adopted when the client wants to assign one organization the overall responsibility of overseeing a project from start to finish. When the design and construction aspects of the project is well integrated, it results in minimization of costs(Lesniak, et al., 2012). Schedule streamlines and overall project efficiencies.  Design and build approach to design often results in the reduction of the overall project timeline mainly because construction can begin as soon as the design is done.

Like any other procurement approach, there are downsides to the use of design and build approach. First and foremost, the absence of bill of quantities makes it very difficult to carry out project evaluations at the start of the project. second, this approach makes it difficult for clients to make design changes after the project has started. The client is often forcedto settle for the design specifications agreed upon at the start of the project and even before the final design blueprint is completed. Third, clients often have difficulty preparing comprehensive briefs when preparing tender proposals. This limitation could then make it difficult for the client to efficiently and precisely communicate his/her preferences or desires to the main contractor. In terms of quality, the client may be short-changed by the contractor due to the open interpretation of the design specification. This would allow the contractor to choose the easiest and cost-effective ways of carrying out the project which may compromise the quality and standards demanded by the client.The fact that the client would have to incur additional cost for design changes made when the project is underway,is testament of the high risk associated with this approach especially when the design of the project is not clearat the time of tendering. Finally, few contractors usually use this approach to procurement, resulting in minimal competition. As such, there are chances the project quality could vary depending on how the contractor has integrated the design and construction aspects of design and build management. Organizations that have fully integrated their design and construction processes would yield the highest quality.

Question 4.

What factors should contractors consider in order to accept an invitation to tender for a construction job?

The decision of whether or not to place a bid on a tender should not be taken lightly because it could significantly impact your profits, cashflows and workloads. As such, a thorough evaluation of a tender proposal is crucial because your time, money, and other resources are at stake here(Kendall, 2017). There are a number of factors to consider in order for you to make an objective decision about whether to accept an invitation to submit your bid. They include profitability, capability, company long-term strategy and goals, and risk

Profitability

Before you can commit to a construction job, you need to first determine whether you will make money from it. If you cannot make money, then it would not be wise to bid on the construction project. A comprehensive analysis of your labor and equipment costs is crucial in estimating your overall project costs(Kendall, 2017). Its on the basis of these costs that you can determine your profit prospects for the job.

Capability

Another factor to consider before you can bid for a job is to examine if you have the capacity to actually complete the job. A review of your current workload and planned future projects, would help you to determine whether you can be able to provide the labor, equipment or the financial resources to adequately the project.  You need to be sure that you have enough resources and liquidity to complete the project without negatively affecting other projects going on(Kendall, 2017).

Long-term goal and strategy

Your long-term vision and goals will often determine the type of projects you choose. A project will be selected based on how it fits your overall organization strategy. Your choice of strategy depends on whether you want to maintain your current level or scale up into new markets or location(Kendall, 2017).

Risk Assessment

Before you can decide to work on a project, you need to identify any potential risks that could crop up during the project. You can identify these risks by reviewing tender documents, project specifications, or similar projects from the past to identify potential safety, scope, or timeline issues(Kendall, 2017)

List of References

Appleman, J.A.,. and Holmes, E.M., 2016. Contract Concerns: Reinsurance Contract Formation, Validity, And Judicial Construction (Vol. 14). Appleman on Insurance Law and Practice

Elliot, C. & Quinn, F., 2017. Contract Law. s.l.:Pearson Education Limited.

Gordon, J.M., 2016. Understanding Contracts for Entrepreneurs and Managers

Kendall, J., 2017. Key Factors to Consider in Bid/No-Bid Decision Making. [Online]
Available at: https://www.constructconnect.com/blog/key-factors-consider-bidno-bid-decision-making
[Accessed 17 April 2020].

Lesniak, A., Plebankiewicz, E. & Zima, K., 2012. Design and Build Procurement System – Contractor Selection. Achives of Civil Engineering, 58(4), pp. 463-476.

Poole, J., 2016. Textbook on contract law. Oxford University Press

Wilkinson-Ryan, T. and Hoffman, D.A., 2015. The common sense of contract formation. Stan. L. Rev., 67, p.1269