The Five Elements Of An Enforceable Contract

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Contracts govern every aspect of our lives whether business, school or home. Adults sign contracts to buy a new car, lease an apartment, start a new job, obtain a student loan and even get married. Contracts are the source document by that promises to deliver a service, money or product. The days where men and women trusted one another and their word was their bond is long over especially in business. There is an old proverb “Better a lean agreement than a fat lawsuit.” (Book of Famous Quotes, 2015, p.1))Contracts set expectations and requirements for each party involved in the transaction. It is supposed to be a document that ensures each participant knows exactly what they are responsible for in the agreement. Communication is an important …show more content…
According to Seaquist (2012) “For a valid contract to be formed that is enforceable by a court, each of the following criteria must be present: Offer, acceptance, consideration, capacity, and legality (p.138). By exploring the five elements, it is easier to determine if the contract is a valid …show more content…
In the scenario above, the contract is governed by common law because it the offer did not involve the sale of any goods. Uniform Commercial Code directs the sale of goods (Seaquist, 2012). Fabulous Hotel’s contract with the head chef is legally sound, there are circumstances where it may be unenforceable.
Fabulous Hotel’s contract contained a noncompetition clause. One way the contract could be void is if the length of time the chef could not take a position in the local area was unreasonable, then the court can through it out. For example, if the clause read “The below-signed agrees to not work as a chef for another hotel in Nevada and four surrounding states of Nevada for a period of twenty years after leaving our employment.” The length of time and distance involved are unreasonable in the example and many courts will invalidate the arrangement (Parrish, 2014). Another way for the contract to be unenforceable is if the company discovers the chef did not have the required United States work permit that is a listed as a mandatory requirement to work at the Fabulous Hotel. This is fraud in the inducement. The hotel entered into the contract because they relied on the chef to have his work permit (Seaquist, 2012). There is an old saying that the biggest lie ever is “I have read and agree to the terms.” This is mistake many

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