A company is an agreement between two people. It aids in formalizing an agreement between two parties about a particular subject. However, for the contract to be effective, there should be an offer, acceptance, it should be of legal capacity, and the parties should enter into the contract at their own will. Any undue influence or false statements and illegal dealings could render the contract void. Below are some of the elements of a valid contract.
Components of a valid contract
Intention to create legal relations
A contract will not be brought into existence just because two parties have agreed. Both parties must agree to enter into a legal agreement. For example, contracts are seen as including a clear intention to create a legally binding agreement. However, the law assumes that domestic and social relations cannot create a legal contract. For instance, an arrangement between families like siblings will not be presumed to be a legal contract.
Not everybody has the legal capacity to enter into a contract. Some people may not have the capacity to make the decisions for themselves, and they include minors, people who have mental impairment, bankrupt individuals, prisoners, and corporations. Therefore, entering into a contract with the above people will render the contract void because it will not be recognized by the state.
Often in a contract, something of value is promised in exchange for an action or non-action sometimes.It can, therefore, take the form of money or an effort, an agreement not to do something or a promise to perform certain services. Consideration is therefore defined as the value that motivates the parties to agree. It is used to distinguish a contract from a gift because they can easily be mistaken.
Acceptance is what determines whether the contract will be there or not. It may be expressed through words, actions or some performance as stated in the contract. If the accepting party is comfortable with the terms of the contract, they will agree to it but if not, they will reject it, and there will be no contract.
The contracting parties must have a meeting at some point to express themselves regarding the contract. When they understand and agree to the basic terms, they are believed to be mutuality. This has to happen because both parties need to know what they are getting themselves into. They also have to agree on the consequences of violating the contract.…
Arbitration has been a part of dispute resolution for a while now. In fact, it is one of the oldest methods used in settlement of disputes. Some people prefer it over court litigation because it offers significant benefits to both parties. Here are some of the reasons as to why it is preferred over court litigation sometimes,
Advantages of arbitration
Arbitration is a creature of contract; therefore, both parties can have a say in the way they want to handle the process from the first day moving forward. The process can accommodate their need, and that is simply impossible in the court litigation process. Some of the decisions that can be made by the party include the length of the process, the conduct of the hearing and pre-screening of the arbitrators. All these decisions are however made in the contractual stage.
It is cost effective
Solving a legal case will involve spending of some money. The costs of the attorneys are the most significant costs, and they increase till the case is resolved. Therefore, a case that will take a long time to be resolved will be expensive. One of the good things about arbitration is that the cases are solved in a short span of time. This, therefore, minimizes the attorneys’ fees because of the short time span it takes for the case to be concluded.
They are private
The arbitration hearings are conducted in a confidential place, and the only ones who can attend are the parties involved and the delegated counsel. This is unlike the court process which has no boundaries thus the public can attend the sessions. Moreover, in the arbitration process, the parties can decide between keeping the matter between them. In the court litigation process, pleas to seal the deal and keep in the low are seldom granted. Some arbitration processes may even go to the extent of having policies regarding the confidentiality of the matter to ensure that it remains private.
Lack of bias
Studies have shown that the arbitration process is fair as compared to the court litigation process. This is because the cases have between two to three arbitrators and they will all make rationalized decisions to conclude the case. They are less likely to be influenced to make a decision that favors one party as compared to a single judge sitting on a bench. Therefore, the whole process will be fair and less biased.…
“Even so then at this present time also there is a remnant according to the election of grace. And if by grace, then is it no more of works: otherwise grace is no more grace. But if it be of works, then it is no more grace: otherwise work is no more work.”
–From The Apostle Paul’s letter to the Church at Rome
C. Ryan Jenkins
Director, Sola Gratia Ministries
A New Covenant & Calvinistic Ministry
Salvation by the Grace of God alone, through faith alone, in Jesus Christ alone, based on Scripture alone, to the Glory of God alone.
Sola Gratia, Sola Fide, Solus Christus, Sola Scriptura, Soli Deo Gloria
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This page last updated on December 4th, 1998
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