BUSINESS LAW & TAXATION

Assignment: 01

Question 01: How does an agreement come into existence?

Answer:
The elements required for an agreement to be a legally enforceable contract
are: mutual assent, expressed by a valid offer and acceptance;
adequate consideration; capacity; and legality.  In some states, element of
consideration can be satisfied by a valid substitute. If the agreement does not meet the
legal requirements to be considered a valid contract, the “contractual agreement” will
not be enforced by the law and not even by either parties.

Question 02: All contracts are agreements, but all agreements are not contract. Why?
Answer:
Agreements andd contract are interlinked to each other. Contracts meant agreeing on
particular matters. In a broader sense, contract is an agreement between two or more
parties in which an offer is made and accepted. The agreement can be formal, informal,
written, oral. Some contracts are required to be in writing in order to be
enforced. Examples of a contract are a lease.
Question 03: Not all agreements are enforceable by law. Why?
Answer:
o If the parties didn't have the intention to enter into a binding contract, then it
might not be enforceable, e.g. arrangements between friends or family.
o If there is no consideration for a promise, then it may not be an enforceable
contact.

Question 04: When does an agreement become contract?

Answer:
In order to become a contract, an agreement must have the following essential
elements:
o Offer and Acceptance: 
In order to create a valid contract, there must be an agreement between two
parties. 

o Intention to create Legal Relationship: 

There should be an intention on the part of the parties to the agreement to create
a legal relationship.

o Parties competent to contract: 

The parties to a contract must be capable of entering into a valid contract. 

o Free consent: 
The contract must have been made with the free consent of the parties.