The importance of a clear understanding of various basic elements of a contract and its acquisition is very critical in the business world. This has been evident in times of dispute in any given contract. The legal of the object to a contract is very crucial. In this case, we are going to see the basic elements of a contract and the stages of negotiations. Contract involving illegal activities and their implications will be considered in this case. Finally, the severability clause is also well explained.
An offer is a show of will from either side to enter into a contract (Ollek 1). The offer should contain a date for it to be valid. If not so the offer is deemed valid only when accepted and if rejected it ceases to be valid. For example, if a party offers for a sale of a car and the other party heeds to the offer. The other when it calls for renegotiation it can be refused or granted the chance depending on the discretion of the person who makes the offer.
This is because the offer become invalid after it was rejected in the first place. The offer should also contain various specifications such as the quality, price, and place of delivery among many others. If the offer is accepted and the party accepting has undertaken its obligation then the contract becomes binding on both parties. The offer can be in writing or not. Despite the aforementioned fact there are exceptions on which the offer must be in writing. The transactions on real estate or the ones which are worthy$ 500 and above must be in written offers. The person making the offer may sometimes be paid to keep the offer open. In such a situation the offer can remain open for ninety days.
The other basic elements of a contract are the acceptance of the offer. This is an expression of agreement with the terms of the offer (Ollek 1). This can be demonstrated by the action of the customer keeping the goods or by failure to reject within a given time. Acceptance can take three ways. One of them is a conditional acceptance. Here the contract was made after the material change of the original offer and thus it is a counteroffer.
The other form of acceptance is expressed acceptance. In this case, the offer is accepted in its original form. Finally, the other form is the implied acceptance in which the acceptance is communicated by the conduct of the buyer. For example, failure to reject goods within a specified time limit is taken as acceptance.
Consideration is a very key basic aspect of a contract. It involves a promise from one party to another after the other party fulfills a certain act (Ollek 1). This benefit may take the form of interest, profit, right, or even responsibility but it must have value. The value attached to the promise is not necessarily monetary. The consideration must have value. The other basic elements of a contract include the fact that the persons contracting are legally binding. This means that they are not for example minors. Also, the subject matter which is being contracted should be legal. Contracts on the illegal subject are not valid. Both parties should have a clear understanding of the terms of the contract. Finally, the certainty of the terms of the contract should be determinable.
The negotiation takes four stages. The first is usually the preparation of the parties wanting to enter into a given negotiation. Here both parties research the values of the item of negotiation (Magrane 1). Also, the negotiation styles are mastered at this place. Secondly, we have an information exchange stage. This is the most critical stage. This stage is characterized by asking questions. This is done to get more information. Also, the clarification on various issues is sought. The main objective at this point is to see things in the other party’s point of view and at the same time in your own perception (Magrane 1). Thirdly, we have the bargaining stage.
In this stage the needs of both parties start to be met. The terms of negotiation are laid on the table from both sides. Here the target of both parties is to get the deal done on their favor. Finally, the other stage involves closing and commitment. The closing occurs when the both parties weighs the available options and adjustment done on both sides. The commitment is usually given by one party to the other and vice versa (Richard 68).
The contract entered on provisions which demand illegal performance is void. For example if the contract illegal activities like the supply of illegal drugs like cocaine. This contract does not have legal object which is one of the basic element of a contract..Thus, it means if one party performs its obligation the other party is not bound to do the same. This due to the fact that the contract is binding to any party since it never existed in the first place.
Severability clause is a clause put when parties are making agreement in order to salvage the contract with possibility of unenforceable provision (Richard 116). In this case if the court finds some unenforceable provision. Then the contract will be enforceable to the extent of its validity. For instance the sale of retail shops on various conditions such as the following: the seller will not undertake similar competing retail shop business within an area of seven kilometers for a period of five years. In this case the court may find time frame unenforceable and reduce it to two years without any further alteration.
It is evident from the above that the entire process of contracting is very critical. Thus, for any success to be realized the process should be well undertaken. In this case we have seen basic elements of contract and stages of negotiation. Also we have seen the impact of contracting on illegal objects. Finally, the severability clause has been well examined.
Magrane, Diana. “Negotiating for success”. 2008. Web.
Ollek, Sucha. “Essentials of a contract”. 2006. Web.
Richard, G. law of contract and criminal law. New York. Oxford Publishers, 2002. Print.