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:
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.
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.
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.
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).
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:
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.
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
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.
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).
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