Question

Discussion Board Week 4: Contracts

This week your discussion topic is contracts. You have learned a lot of the different legal requirements to hold an event public or private. The event planner must be heavily insured and should have their business incorporated, although they can have a business without corporation. There are many required licenses, city, state and federal, permits and tax ID numbers. Contracts are one of the most important legal documents you can have. Still, today many people still think because they are friends, they can just give their word. However “their word” will not hold up in court if anything goes wrong. Just let a bride’s wedding go wrong, friend or not, there will be restitution for the errors or lack or delivery.

In your discussion question you will discuss the importance of a contract and how you are protected. Discuss what can go wrong if there is not a contract and how the situation would be different if there was a contract. Include in your discussion the four parts of a contract and if you would still have a contract if one of the parts was missing. Include the answers to the following questions in your discussion because it will help with a better understanding of the concepts. Also, talk about what a counter-offer is and how to deal with it.

What are Parties?

What is an Offer?

What is Acceptance?

What is Consideration?

Have you ever had a contract to get some work done and it turned out the contract assured the work was done on time and correctly?

The purpose of this discussion is to have a good understanding of what constitutes a contract and why a contract is important.

Answer 1

A contract is a legally binding agreement between two or parties (people or entity). Contracts can be either verbal or written or combination of both. Written contracts are more popular as they consists of standard agreement form which reiterates the terms and conditions of an agreement.

A contract comprises of four fundamental elements

1.         An offer – An offer is a call to people or entities who agree and wish to accept the terms and conditions of the contract.

2.         An acceptance - Acceptance occurs when binding terms and conditions contract is mutually agreed upon by giving consideration (generally money) to close the deal. The acceptance of the contract is valid till the time the terms and conditions mentioned in the contract are met

3.         Intention to create legal relationship – Intention to create legal relation means intention to get into a lawful agreement by the parties or entities who want to enter the contract legally and seriously.

4.         Consideration (Financial and other terms and conditions) – One of the vital elements of contract, it basically benefit which must be negotiated between the parties of entities of the contract. In contract, one consideration is exchanged for another consideration.

Contract is a legal binding term, in case, if something goes wrong with the contract terms and conditions or the other party is not completing their share of commitment, then an individual can always go to the court of law, show the contract and sue the other party for penalty. But, if the legal contract was not there, then no one is going to listen and things can horribly go wrong and no one can be held responsible for the same. Therefore, to get a legal help in possible situation where things can go wrong, parties should always enter into a legal contract

What are Parties?

Entities (being, individual, person or parties) entering into a binding agreement with one or more entities are known as parties. Contracting parties mutually agree and accept the obligations and benefits specified in the contract.

Have you ever had a contract to get some work done and it turned out the contract assured the work was done on time and correctly?

Yes, I had to get my place renovated, but I was tight on time and budget. I met a contractor who assured me that the house would be renovated on time and within budget provided to them. He went on house inspection with me as I wanted to show him what all work I wanted to be done and what all would he suggest. After about half an hour, I realized that the details he has told me and asked me needed touch and repair was far beyond my budget and will take up more than double the time I had at hand. After the meeting with contractor, I sat down and was thinking what should be done, when my father suggested entering in a legal contract with the contractor so that he does not go back on his word and also put a penalty clause into the contract stating that the delay will attract penalty. I did exactly the same thing. To my surprise, every nook and corner shown by him was intact after the contract, nothing was wrong with them. The contractor had to work according to my wishes and budget and also on my given time frame. Thanks to my father for advice, I got the house on time with all the necessary renovation done and I managed to save a few thousand dollars.