Four Elements That Make A Valid Contract

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A contract is a settlement creating requirements enforced by law. A contract is made up of four elements, which makes a contract valid. These elements are agreement, consideration, contractual capacity and lawful object. Agreement, to make a contract enforceable, there must be a settlement between the parties. This requires an offer by the offeror and an acceptance of the offer by the offeree. There must be mutual assent by the parties (Cheeseman, Henry R (2013). These four elements constitutes a valid offer; consideration, something of value was promised in exchange for something else, this could be for a specific action or non-action. It can be in the form of money or effort, an agreement to complete some service, a promise to not complete …show more content…
Chin has recently started doing business in America, and is willing to provide 100 percent of the widget that Gloria need for $4.01 each. This is not a valid contract because Gloria has not made an agreement and any consideration with Chin, as yet. Mateo Bonilla owns his business in Brazil and wants to expand. He has never done business with an American company but is willing to manufacture 10,000,000 widgets at $3.83. This is not a valid contract because Gloria has not made an agreement with Bonilla and there is no evidence of consideration. Expanding a business overseas can benefit the company by opening doors for new opportunities and profits. Unfortunately, it is not that easy to go international, there are some risks and difficulties. Some concerns Gloria should consider before doing business overseas are legal issues, language issues, culture barriers and supervisory oversight. Gloria has made contacted with Chin from China and Bonilla from Brazil. It is best for Gloria to familiarize herself with the laws and taxes in those countries. Every country has different laws and legal issues. If Gloria does not have enough knowledge about these legal issues, it is best for her to seek professional advice. Professional advice will prevent her from being fine or facing any …show more content…
What might seem acceptable in America might not be acceptable in another country. Marketing style in other countries may also be different from the marketing style in America. Another issue might be, polite actions in American might not be considered polite behaviors in another country ( ).. It is very critical to learn the culture of other countries, which you choose to do business with. Supervisory oversight is essential when you’re doing business overseas; it is good to have someone or a few employees in the country where you’re doing business. They will be able to keep you updated with the status of your business and of any possible problems. Not having a suitable oversight, you will probably pay for sweatshop labor or sign unfair deal ( ). There have been cases where hazardous products were imported from other countries, so it is very important to make sure that the products you’re spending lots of money for does not put your customers in jeopardy (

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