Understanding Business Law

businesslaw1Business Law – Understanding The Contract We Are Signing.

Throughout one’s life, contracts are documents that we will enter into, sometimes without really thinking about it. It is therefore very important to be able to have some understanding of business law and¬†understand a contract and what the contents of it mean and how it will affect you. It is an agreement between parties that have set out terms and conditions for a specific period that has been agreed too, depending on the individual contract. Lawyers are the best people to draft contracts as they are the most experienced in the field of including what should be included and what should not. In the past, lawyers included legal terminology and jargon which a lay person had trouble understanding, but now lawyers have learnt to avoid the legal jargon and focus on plain English, but some are still stuck in their ways. Using legal terminology can mean that contracts are difficult to understand and read and the use of Latin terms hardly helps the matter either. Reading a contract therefore can be a very confusing and sometimes stressful thing, so therefore understanding it is crucial before signing anything.

The requirements of a contract to allow it to be valid and legally binding are important for anyone to get their head round, whether you are drafting a contract or entering into a contract written by another party. But it must be remembered that not all contracts are in writing and many can be created without needing to be in writing such as purchasing a newspaper from a newspaper stand outside a train station. Nevertheless, there are still certain requirements that need to be adhered to for the contract to be legally binding.

Firstly there needs to be intention to form a legal relationship, which is obvious in most contractual agreements. This means there should be at least two people involved who are able to enter into a binding situation, therefore has to be competent and not a minor (under the age of 16).

Secondly there needs to be consideration which essentially is the determining factor between a deed and a contract. In a contract both parties to the agreement are required to provide consideration to make it binding. Therefore they must contribute something in the contract such as one party giving a service and the other giving money for that service.

Thirdly, there needs to be offer and acceptance. This means that an offer is made and acceptance is given. A contractual relationship will not be binding unless this offer will be specified by one party and the offer has to be accepted by the other party to the agreement. It is therefore very important that an acceptance is a whole acceptance and is not a partial acceptance, and this type of acceptance will usually represent a counter-offer. It must therefore be remembered that a counter-offer will be required to be approved before the contract has been validated.

For more legal advice and information, and for free legal resources visit lawontheweb.co.uk.

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