Business law

MEANING:

 Laws can be defined as rules that society enforces to ensure its survival and smooth functioning.

BUSINESS LAW:

This is concerned with all the aspects of law that govern business transactions.

Business Laws are system of rules, which govern business transactions. These are aspects, which deal with the operations of business activities.

Branches of Commercial Laws.

The various branches of commercial law are as follows:

1. Law of Contract.
2. Agency
3. Sales of goods.
4. Law of Employment.
5. Hire purchase.
6. Guarantee
7. lien
8. pledge
9. Bankruptcy

LAW OF CONTRACT.

1. A contract is a legally binding agreement imposing rights and obligations on the parties, which will be enforced by the courts. It is a promise or a set of promise, the breach of which, the Law gives a remedy and the performance of which the Law, in some way recognizes. An agreement requires the existence of at least two parties. One of whom, called offeror makes a proposal, which the other called offeree is willing to accept.
2. In a simple term, a contract is an agreement which is enforceable by law.

• Contract can broadly be defined as an agreement between two or more parties that will give rise to enforceable rights and obligations.

NOTE: The basis of all contract is agreement, a consensus “ad-Idem”, that is, the coming together of two minds with a common intention. It should be noted, however, that the term agreement does not always mean contract because not every agreement is a contract. For instance, an agreement to borrow your friend’s new TV game for the weekend would not create any contract because the agreement was not intended to create a legal obligation between you and your friend.

CLASSIFICATION OF CONTRACT

Contracts can be classified into:

1. Specialty contract or contract of deed.

A specialty or contract of deed is typed, signed, sealed and delivered by one party to another. Some contracts must be under seal e.g, transfer or conveyance of legal estate and contract made without consideration.

Essential of Deed.

1. writing
2. signature
3. seal
4. delivery

1. Simple Contracts: These are contracts which require consideration. They purchase the following characteristics; offer and acceptance, intention to create legal relations, valuable considerations etc. they are not required by the law to be under seal.

FEATURES OF CONTRACT

The following are the features of a valid contract.

1. Offer and acceptance.
3. Contractual capacity of the parties.
4. Intention to create legal backing.
5. Consent of the parties must be genuine.
6. Legality of objects.
7. Possibility of performance.
8. Terms of agreement must be certain.

OFFER AND ACCEPTANCE

One of the parties, the offeror, must make an offer, which should be accepted by another party called the offeree. The acceptance of the offer by the offeree should not be qualified. An offer is a statement of a willingness to be bound on certain specific terms. It is a promise which is bound on certain specific terms and can be converted to a contract by acceptance.

ACCEPTANCE: This is a final and unconditional expression of assent to the terms of an offer. The offeree will accept an offer made by the offeror.

CONSIDERATION MUST BE VALUABLE: A contract is valid if the gain to one party is balanced by some benefits known as consideration to the other party. The usual form of consideration is the payment of money. Consideration is simply the element of exchange in a bargain.

INTENTION TO CREATE LEGAL BACKING: For an agreement to be enforceable as a binding contract, if must have been the intention of the parties to create legal relations.

CASE: Merrit Vs. Merrit. A man agreed to pay his wife a sum of forty pounds per-month after the marriage broke down, the wife promised to discharge their mortgage. The men failed to fulfill his own part and the wife sued and won. It was held that they had the intention that any agreement they entered into should be binding on them. Therefore, there was a contract.

CERTAINTY OF TERMS OF AGREEMENT: The terms of agreement should be put down and clear to the parties involved in the agreement. The term can be expressly or impliedly stated.

ALL PARTIES MUST HAVE CONTRACTUAL CAPACITY: Those entering into a contract must have contractual capacity. An adult may enter freely into any contract subject to the following exceptions.

ALIENS: An alien has full capacity except that in time of war, an alien enemy may not enter into or enforce a contract made before he becomes an alien enemy. Any contract thus made becomes void completely.

MENTAL PATIENTS AND DRUNKARDS: In respect of contracts entered into by drunkards and by persons suffering from mental disorder who nevertheless are allowed to manage their affairs, the general law is that the contracts are voidable by them but only if the other party is aware of their disability of the time the contract is executed.

CORPORATION: A corporation can enter into a contract but any contract outside its memorandum of association is void.

MINORS: A minor is somebody who has not reached the age of 18 years. Contract entered into by infants may be void, invalid, voidable and unenforceable.

THE CONSENT OF THE PARTIES MUST BE GENUINE: One of the essential requirements of any contract is the genuine consent of each party to assume the rights and obligations resulting from his becoming a party to the contract. The consent of the parties should not be by mistake, misrepresentation, undue influence or duress.

FORMALITIES OF A CONTRACT: A few contracts require a particular form usually to provide better evidence of the term and so to prevent disputes. Such contract must be;

1. Under seal
2. In writing

• Evidenced in writing

THE OBJECT OF A CONTRACT MUST BE LEGAL: The object of a valid contract must be legal. A contract may be illegal because it is deemed to be contrary to public policy.

Examples of Illegal Contracts.

1. Contract for the commission of crime.
2. Contract for the sales of public offices.

• Contracts intending to impede the administration of justice.

1. Contract made with an enemy in wartime.
2. Contract for promoting immoral purpose.
3. A contract to pay money in the commission of an unlawful act.

• Contract intended to defraud the revenue.

IF MUST BE POSSIBLE TO PERFORM: Another essential characteristics of a valid contract is the possibility of performance. There must be an assurance that the parties to a contract can actually perform their respective obligations in the contract. A party can enter into a contract with another party once he is sure that he can do it.

ASSIGNMENT

1. Differentiate between offer and acceptance
2. What are the feature of a valid contract