Answer to Question #316185 in Management for Niku

Question

John Doe wants to draft a contract for his client where he will provide consultancy services. Kindly help John Doe with the following queries:

a. What are the essential elements of contracts? (5 Marks)

b. Describe the events which make a contract, though executed or entered into, a voidable contract?

Answer 1

Essential elements of contracts

A legal contract is an agreement between two parties that creates mutual, legally enforceable obligations. Certain essential elements must be present before a written contract is binding, including: identification (names) of the parties, the purpose of the agreement, a detailed statement of the rights and obligations of each party, what each party is giving (for example; money, products, or services) in exchange for what they’re getting, the term of the agreement (when it starts and when it ends), termination rights (when and under what circumstances one or both parties can end the contract before the normal end date), liabilities of the parties if something goes wrong or they have a dispute, signatures, and many other provisions like lawful purpose and written documentation.

Events which make a contract, though executed or entered into, a voidable contract

A contract may be rendered voidable if: Any party was under duress, undue influence, or was being intimidated, coerced, or threatened when entering into the agreement; Any party was mentally incompetent (i.e., mentally ill, below the age of majority), mistake (A contract can be cancelled on the grounds of a mutual mistake of fact) or lack of capacity (A person must have the legal ability to form a contract in the first place).