Explain the different types of business agreement and the importance of the key elements required for the

formation of a valid contract (1 a) Business agreement or contract is defined as an agreement which legally binds the parties. For example, party A and party B have agreement in trading good for 3 months with specific term, then they already get into a contract.

There are 4 main types of business agreement (contract): unilateral, bilateral, partnership, and sales and employment agreement. Firstly, unilateral contract or one-sided contract is a contract which benefits for one party. A party (offeror) makes promise in exchange of an act or performance from B party (offeree). In another word, A party has to do as promise if B party performed as they are said. If after B performed, A does not give what he/she has promised, B party can sue A party for breach of contract. However, A party can not enforce B party to do as the contract because no return promise has been made to A. Unilateral contract is often a reward. A party offers some money to B party who can fulfill the requirement of A. For example, A party lost his dog and promise to give anyone who can find and return the dog 1000$. If B party can find the dog and return to A, B will receive 1000$. If B give the dog to A but A refuses to pay B, B have the right to sue A for breaking contract. The court therefore will enforce A to give money to B as promised. Contradict to unilateral contract; bilateral contract is a two-sided contract which often is trade agreement. In bilateral contract, both party exchange promise and are enforced to do as they promise. The main different between unilateral contract and bilateral contract is that in unilateral contract only A give promise and be enforced to do if B fulfill As

requirement while in bilateral contract both A and B must give promise and have time to consider whether to accept or not. If they have agreement then they must do as they promise. Once, A or B party does not follow the contract, the other can sue for breach of contract. For example, A promise to buy 5 boxes of pencil if B accept payment within 1 month, B decide to allow A pay within 1 month if A buy 10 boxes or more. After considering, A and B have an agreement that A will buy 7 boxes and B will receive payment after 1 month. Therefore, A and B have entered into a bilateral contract and if one party does not follow the contract, the other can sue for breaking contract. Partnership agreement is the contract bound by 2 or more parties in order to form a business. The contract shows nature of the business, capital contribution, profit distribution and response of each party in the business. The contribution, right and response of each party have to stated in the contract in written form in order for the contract to be valid. In some cases no written form is required for partnership such as two parties who trade rice can have a partnership without a written contract. However, it is difficult for business to determine and solve problem without a written agreement because the business easily get lost in controlling activities and sharing profit as well as loss. An example of partnership agreement is Peter, Mary and Ken want to open a cloth shop. Peter contributes 1000$, Mary contributes 1500$ and Ken contributes 500$. They agree to share profit as well as loss equal to the percentage of their contribution to the total capital of company. Peter is responsible for buying cloth, taking care of the shop is duty of Mary and manage finance is the response of Ken. Therefore, Mary Peter and Ken have form into a valid contract and they have response to follow the contract.

Sale and employment agreement are written agreements between an employer and an employee that detail the workplace duties and responsibilities of the employee and the compensation that the employer provides in return. Employment contracts typically lay out the wages, bonuses, vacations, medical leaves (including maternity/paternity), stock options, and other benefits and compensation that the worker receives for fulfilling his/her obligations to the employer. These obligations are also specified in the contract, as is the duration of the worker-employee arrangement, the authority of the employee, ownership of intellectual property, and dispute resolution mechanisms. These agreements also include termination provisions, and they may also include post-employment confidentiality, non-compete, and non-solicitation clauses.1 An example of employment contract is at appendixes The contract can only be built when 2 or more parties have agreement. In another explanation, one party will offer for something in exchange of something else. It is called offer and acceptance. Another key element which ensures the valid of a contract is consideration. Each party must willing to follow the contract and have time to consider whether to sign or not. The third element is intention to create legal relations. The parties to the agreement intend that their promises be legally binding.

Even if three essential elements is presented, there still some factors which may influence to the valid of the contract such as form, genuine consent, capacity, content and legality. Generally, a contract can be made in written or oral form. However, some parts of the contract have to be made in a particular form.

http://www.answers.com/topic/employment-contract-1

Genuine consent: the contract must present in clear and easy to understanding. It has to have no misunderstanding or cross-purposes in the precise nature of the contract.

Capacity: children have limited capacity to enter in a contract. Persons who are 18 or more have capacity to enter most of contracts.

Content: A contract must be complete and precise in its terms. Legally: the courts will not enforce a contract which is deemed to be illegal or contrary to public policy.