Australian Business Law

INTRODUCTION

This question deals with the validity of contracts . The main issue in the case study pertains to the validity of the employment contract entered into by the Managing Director and Lee , the jockey hired . A contract is a promise or set of promises that is legally binding . Under a contract , one person undertakes to do something or to refrain from doing something if another person does something or refrains from doing something . In for the contract to be legally binding , there must be an agreement , consideration , intention to create legal relations

, the legal capacity of the parties to contract , a lawful purpose , a legal subject matter , and finally the compliance with relevant legal formalities . If any of these requisites is not present , the contract will not be binding

REQUIREMENTS OF A BINDING CONTRACT

Agreement

The first requirement for a valid contract is an agreement . Normally an agreement consists of two stages : offer and acceptance . The agreement generally involves a consensus , or meeting of the minds between the parties . It is essential that the agreement be definite An agreement which is ambiguous or which is a mere agreement to agree cannot be enforced

Consideration

The second requisite is consideration . Consideration is what the promisor is asking for in exchange for the promise . Many countries do not require consideration in for a contract to be valid . Often the fact that parties formed a binding agreement is sufficient to enforce a contract . However , under common law , in for an...