Contract:The Soul of Business

Posted by Law Article on July 13th, 2009 at 11:39am

I sometimes imagine how life would have been with a single individual facing life all by himself in one desert with everything he needs for his comfort. I believe it would have been very drab. It would have been life devoid of the usual social interactions that defines life in the communal setting. The above scenario is practically illusory today, may be consistent with the Stone Age. Nigeria today is made up of about 140 Million people, India about 800 Million, USA over 300 million, China about 1.6 billion and basically every community is a community of individuals with different traits and sometimes culture, religion, etc. The progressive change factor today has made the world a global village with social/business interactions across international boundaries. The implication of the above is that individuals within a particular community are foisted with the responsibility of engaging in contracts whether social or formal to lubricate their interactions without which life will be the survival of the fittest. A contract is an agreement between two or more people to do or be engaged in something. In every facet of life we see the inter play of contract. It will therefore be apposite to describe contract as the soul of life and those who have disregarded the essence of contract in their daily and particularly business relationships have done so at their own peril. The nationals of any country have knowingly or unknowingly given their consent to a social contract to live together in accordance with the dictates of the Law of the land; the family unit is enforced by an agreement between spouses to get married. It regulates the workplace (employee/employer relationships) and most importantly plays a pivotal role in our day to day business relationships, whether in the area of supply, provision of services, admiralty (carriage of goods) and equally in every facet of the economy. A good knowledge of the Laws or principles regulating contract will be an advantage to entrepreneurs and other business men as same will greatly protect their business interest and minimize the risk of proceeding upon void or void able contracts with great faith on it but with little or no legal consequence. The result will be dashed hopes when the need will arise to rely on such contracts. Certain basic elements exist in any valid contract i.e. 1. OFFER: This is defined as a definite undertaking or promise made by one party with the intention that it shall become binding on the party to whom it is addressed. 2. ACCEPTANCE: Acceptance is an indication by an offeree made while the offer remains open and in the manner requested in the offer of the offeree & willingness to be bound unconditionally to a contract with the offeror in the terms stated in the offer. 3. CONSIDERATION: Consideration is an act or forbearance of one party or the promise therefore, it is the price for which the promise of the other is bought and the promise thus given for value is enforceable. Contracts are preceded sometimes by an invitation to treat which are preliminaries to the contract and as such does not simpliciter confer any legal right. The starting point of a valid contract is an offer extended by a party either to a specified person or to the world at large. For a contract to be established, the offer must be accepted by either the party it is directed to if specific, or by any one if general. Every contract has two sides to it’s benefits and the forbearances once an offer is accepted, for a party to rely on it he must have furnished consideration (forbearance) which will then entitle it to earn or enjoy the benefits from the contract. Careful attention should be given to the terms of any contract before going into it as the court will usually give effect to such terms under the principle of sanctity of contract except where the contract is blighted by undue influence, mistake or entered under duress or element of fraud or for non compliance with existing statutes as they relate to illiterates, infants etc. It is important not to put your signature on any contract unless you are sure of what you are signing, it could be toying with the soul of your business.

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