Student Name: Anas Ahmed
Student ID: 10299
Course Name: Business Law & Taxation
Course Code: BUS482
Instructor Name: Muhammad Hasan
Institute: Iqra University Airport Campus
Class Timings: (Wed 15:00 to 18:00) Online.
The objective theory of contract is defined as the one that holds an agreement between two or
more parties legally binding and enforceable given that a reasonable person, who is not a
party in the contract, provides an opinion that an offer was made by a party and was accepted
by another party.
In case, an offer is made by X to Y to transport a truck full of marijuana to another state for
$3,000 and Y agrees and accepts the offer. In this case, the offer is not valid, and a contract
cannot be formed. It is because it involves marijuana that makes it an illegal contract since its
inception. It can also be called a void contract.
General principles which are involved in the formation of the contract are to have an
intention to create legal relations, offer and acceptance of the same contract, lawful
consideration that is the particular value that would be exchanged in the contract, the capacity
of the involved parties, free consent, object of the contract must be fair and equal and the
agreement must also have the elements of certainty and possibility of performance for it to be
enforceable by the law and not void.
Now, these are the principles that are mentioned above. Apart from that the important
elements which make a contract legal and not to be void are offer which is given by the
supplier or anyone who is drafting the same contract, an acceptance which is given by the
person who is excepting the contract, a consideration which we have to discuss before that as
it is the value that has been exchanging the same contract, legal lite and capacity which talks
about the fact that the poor 80s which are entering into the contract should be legal and also
has the right capacity that is the mental establishment of dealing with the persons, the legal
objective and certainty of every valuable thing and item to be included.
Essential elements of a contract include.
1. Offer and acceptance: Any contract must include an offer from one side and acceptance of
the offer from the other side with an exchange of some value between the parties.
2. Free will: Both the parties must enter a contract willingly and with full consent. No party
must be forced to enter the contract. For example, no person must be manipulated and forced
to sign a contract just because they are obliged to do so.
3. Legal formalities: The contract must be legal, and no illegal ways must be followed while
making the contract. Every legal procedure must be completed, and the contract must be
legalized properly with the signatures of both parties.
4. Capacity and credibility: Both the parties must be able to fulfill the contract and they must
show proper eligibility criteria. No contract must be made beyond what a party can fulfill.
5. Every contract must have witnesses when the parties are making the contract and must be
done in a legal manner fulfilling all the requirements.
When a contract satisfies all these requirements, the contract is said to be legal and valid.
The given employee agreement has following essentials:
1) This employeement contract is a legally binding document and it is legally enforceable
with the approval of the law. All parties are obliged to conclude a legally valid contract.
A contract is an agreement between two or more parties and is legally enforceable. The
following is very important for a contract to be a valid contract.
2) In this contract, a legal offer is accepted on the one hand and legally accepted on the
other hand. In this employment contract, the employer makes an offer to the employee to
accept it.
3) In a valid contract, agreements are made to create legal relationships, or they can create
legal relationships. These two parties are decided to establish a legal relationship, and
this would be commendable for the failure of the contract in question should one of the
parties fail to fulfill its promise. In this employment contract the employer makes a
proposal and the employee must accept it. So much so that they form a legal relationship
and are mutually agreed to fulfill their promises.
4) In this, the promise in the contract wants something in return for what is promised. An
ignored promise is not an agreement. In the employment contract, the employer, as a
contractor, wants to receive something in return for his promise.
5) Parties entering into a valid contract must be licensed. Minors, unsound and legally
disqualified persons are not entitled to conclude a contract. It is also essential in an
employment contract. The employer does not commit fraud.
6) Free approval is another important thing for a valid contract. The consent of two or more
parties that should be free. The parties to the contract agree on the same issue. In the
employment contract, it is accepted that the employee who accepts the offer and accepts
his consent while accepting the employer's offer is free. Repression, fraud,
misrepresentation, error, etc. Consent is free when the party does not prompt the party to
consent.
7) When an agreement is illegal, immoral or against public policy, such agreements cannot
be considered as valid agreements. Therefore, a valid agreement must have legal
considerations and legitimate purposes. The employment contract is also not immoral or
contrary to the opinions of other parties.
8) The terms in a contract should be very clear. An uncertain contract is not a valid contract.
The employment contract is also open to all parties and, after understanding all the terms
in a contract, the parties that sign the contract mutually.
9) An agreement to do something impossible is not a valid agreement. Therefore, a valid
contract must be able to be fulfilled. In the employment contract, the employer does not
give any duty that cannot be done.
10) The agreement must fulfill all legal formalities. The valid contract must be written and
recorded. Then only the parties can apply to the court to find any legal remedy in case of
breach of contract.
11) The contract is not explicitly declared invalid. In an agreement, some agreements are
explicitly declared invalid by law, in which case this agreement or contract is invalid.
