18 Activity and efficiency If a person is “fit to do business”, it simply means that he or she has the legal authority to enter into binding legal agreements. 6 Offer An offer is the expression of a party (usually referred to as a supplier) that it is prepared to make a deal Chapter 8 – Introduction to contracts – Classifications, terminology and training REED SHEDD PAGNATTARO MOREHEAD F I F T E D I O N McGraw-Hill / Irwin. . BCL_INDIAN CONTRACT ACT 1872 PROVISIONS RELATING TO OFFER and ACCEPTANCE 21 Classification of a contract after performance Contracts may be classified according to the manner in which the parties perform it. 24 Executable and performed contracts A contract performed is a contract that is not yet fully fulfilled. An executed contract is a contract in which all the necessary actions have been concluded. 25 Invalid and questionable contracts A “non-compatible” contract is a contract that has no effect. A cancelled contract cannot be applied. A countervailable contract is one that could be invalidated but has not yet been cancelled. 11 Notification of acceptance The person accepting the tender (the tenderer) must notify the tenderer of that acceptance.
13 Can a person accept through silence? Only shares can signify acceptance. 12 The Voicemail Rule This rule states that an acceptance is legally valid if it is filed in the U.S. Postal System. 9 How long is an offer valid? An offer is extinguished on its own terms or after a reasonable period of time. A “reasonable period of time” depends on all the circumstances on a case-by-case basis. 26 The status of fraud The Fraud Act is a law which requires certain types of contracts to be reduced to the written form before being considered legally enforceable. 10 Acceptance One valid offer creates the force of acceptance in another. 16 Language needed to create a contract There is no magic formula of words that should be used to create a contract. 8 Offers can be made by words, by deeds or by any combination of the two An offer can be made without words. 5 Mutual Consent Mutual consent is the final product of a valid offer and acceptance. In addition, often referred to as the “meeting of heads”, 15 counter-offers are new offers, not acceptance of the initial offer. 2 What is a contract? The legal definition of a contract is a promise (or series of promises) that, if breached by one party, is binding on the other party.
. 17 Consideration The main reason for a contract; a person gives up something of value in exchange for receiving something valuable through the contract. 20 types of contracts There are many different types of contracts. 7 The principle of acceptance concerns the right of the person receiving the offer to accept it and to draw up a binding contract. Business Law Chapter 2: Offers. Introduction to offers How clear should an offer be? What does the law require for a valid offer? 22 Unilateral treaties Unilateral treaty: a contract in which one party makes a promise in exchange for an act of the other party. Institute of Business Management, Karachi • LAW 409 3 Technical contracts These contracts have formal requirements and are often governed by specific statutes. Examples of such technical contracts are: Negotiable instruments Accreditation contracts “under seal”. 19 The subject-matter of the contract must be lawful For obvious reasons, a contract involving illegal activities is not imposed by the judicial system. 14 End of the capacity to accept The capacity of acceptance of a person may be terminated by: Withdrawal of the tender by the tenderer A refusal of the tender by the tenderer The prescription or subsequent incapacity of one of the parties The failure of a necessary condition. . .