Law essay
In contract formation, the element of intent is very vital, whereby the intention of a person to establish a binding contract is determined by the outward and objective facts. For a contract to be binding there are various requirements that should be met lack of which will mean that not contract is formed.
Offer
This element involves a promise by a party to act or desist from acting in turn the other party gives a similar return promise. Other offers may not involve a return of another promise but require the other part to perform the act or desist from acting. Preliminary negotiations are different from legal offers in that the persons involved in preliminary negotiations do not presently have intent to enter into a contract (Miller & Jentz, 2010).
Acceptance
This element involves assenting to the terms of the contract and should be made according to the specifics of the offer. If the offer does define the manner of acceptance, a reasonable manner under the prevailing circumstances may specify the acceptance. The valid of an acceptance is only upheld if the offeree is aware of such an offer and his behavior indicates that he intends to accept and the expression of the acceptance does not involve conditional or ambiguous agreement to its terms (Miller & Jentz, 2010).
Consideration
Every party should provide something valuable that will persuade the other to establish the agreement, and such value does not have to comprise a currency. Rather, it may comprise of promise to carry out an act that a person is not legally bound to do or to desist from performing an act that is his or her legal entitlement (Miller & Jentz, 2010).
Mutuality of obligation
The principle of mutuality of obligation holds that each party should be bound to carry out their obligated acts. Otherwise, the agreement will be treated under the law as if none of the party is bound by it. After exchanging the performance agreement, no party may be given the unlimited or absolute right to dissolve their contract (Miller & Jentz, 2010).
Competency and capacity
The aspect of competency and capacity involves the fact that a natural person who is a party to a contract has full legal capacity to bear liability for duties he or she agrees to perform. The exception is in case the individual is unable due to intoxication, mental incapacity or he or she is a minor (Miller & Jentz, 2010).
Writing requirement
There are bodies of laws that have been enacted specifying that some contracts should be written to be binding. This is referred to as the statute of frauds. Not all contracts needs to be written since oral contracts are also binding (Miller & Jentz, 2010).
In a surety agreement, one person (surety) enters into an agreement with a creditor to perform the obligations of principal debtor (Cipollone, 2014). In the above case, liability of the surety (Kevin) is determined by whether the debtor (Bonnie) will default on payment of the debt or not. In this suretyship agreement, the salesmen wanted the Kevin to bind himself as a co-principle debtor with Bonnie so that Kevin was liable in similar manner with Bonnie, the principle creditor. In this case, a default by Bonnie means that Kevin would liable for the loan taken and is responsible to the creditor for the purchase of the lawn mower. A Surety stands more favored in law than the principal debtor since his or her liability is trimmed to a level that can be perceived acceptable by the court. The law takes a more vigilant approach by construing sureties’ obligation or limiting their liability to the specific terms of the agreement (Cipollone, 2014). This means that the surety’s liability or guarantor’s liability cannot go beyond what is implied in the defined terms of the contract. Kevin in this case is responsible to the salesman who loaned money to Bonnie and therefore, will have to pay the debt since Bonnie defaulted on payment. Also, Bonnie is responsible to Kevin for the mower. After a surety makes the payment for the debt to the creditor, all the creditor’s rights are shifted to the surety by sub-rogation (Cipollone, 2014). From that times moving forward, the surety will be the creditor. In this case, Kevin can take ownership of the mower if Bonnie fails to refund the money.
To begin with, Hallie has no legal capacity to enter into a contract with Meta Education because she is a minor as per the Stare of Stuart. The basic rule while entering into a contract with a minor is that the minor can void the contract as long as the contract does not involves necessaries. The aim is to protect the young persons who may not be able to fully understand the effects of some contracts. This means that the minors are allowed to exit such contracts at their own discretion, a right that the other party does not possess (MILLER, 2018). The above case means that Hallie has the right to void the contract while Meta Education does not have such rights.
References
Miller, R. L. R., & Jentz, G. A. (2010). Fundamentals of business law: Excerpted cases. Mason, OH: South-Western Cengage Learning. 160-163
Cipollone, D. (2014). The Liabilities of Sureties. WJ Legal Stud., 4, 1.
MILLER, R., (2018). BUSINESS LAW: Text & exercises. S.l.: SOUTH-WESTERN.
