This report presents an analysis of a contract involving supplying, installing, testing and commissioning a lift. Particularly, the definition of the main aspects of the agreement: offer and acceptance, considerations, legal purposes, and legal power of the contract.
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Offer and acceptance
Offer and acceptance assessment is an old concept in business regulation utilized in determining whether there is a contract between two entities. As an agreement is a contract, an offer refers to a sign by a single party (i.e. a supplier in a supply and installation agreement) to a second party (i.e. the client) of the supplier’s readiness in entering into an agreement on specific conditions without additional bargaining.
An agreement exists when acceptance of an offer (based on terms provided) has been copied by the “offeree” to the “offerer”. In this case, Al Mohtadi Commercial Agencies is the offerer and Mr. Salem Al Hamly is the offeree. The agency through the general manager, Mr. Tarek Abdallah, offers to supply a lift without additional negotiations and Mr. Salem Al Hamly accepts to be supplied with the item as per the agreement (German Intelligent Technology, 2010).
Basically, consideration is an assured plan, or exclusion of plan, that the supplier did not previously have an earlier role to abide by. A consideration can be in terms of finances, tangible item, service, activity, or a restraint to act. One entity to an agreement has to exchange consideration to the other entity for the agreement to be legally-binding.
As mentioned earlier, an entity which already has an authorized role of providing finance, a product, a service, an operation or a restraint to act, does not offer consideration when offeree simply supports that role needed by agreeable roles, contract regulation or other already existing roles. Additionally, it is critical to understand that past considerations generally are not legally-binding.
That is, they have to be finances, items, services, activities or restraints of action offered in expectation of the agreement to be legally binding considerations. In the contract, Mr. Salem Al Hamly enters into an agreement with Al Mohtadi Commercial Agencies stating that he will pay Dh 130,000 in consideration of the agency’s good service for supplying and installing the lift.
Also, the agency must maintain the lift for free for the next 400 days (German Intelligent Technology, 2010). That is a valid consideration, since the 400 days of maintenance in the future is a legally-binding consideration.
Legal purpose and legal capacity
Lawful agreements, in which one of the agreeing entities is below eighteen years, can be voided by the minor. For the purpose of Agreement regulation, an underage party is an individual aged below 18 years. But, the whole agreement is voidable.
An underage person may, under no duress, legalize an agreement on reaching maturity. A person that is under the influence of drink or mentally challenged during the time of agreement is considered to be lacking lawful capacity to form an agreement.
For the purpose of Agreement regulation, an organization is considered to be an artificial party since it is a distinct entity. The common law indicates that anything excluded in the organization’s capability, whether deliberately or through inference, is not within the capacity of the organization, and therefore any agreement formed may be voided by the organization, but any right or interest of naïve party linked to the organization is typically guarded either by equity rule or through legal stipulations.
In conclusion, based on the above discussion and the content of the contract, the agreement between Al Mohtadi Commercial Agencies and Mr. Salem Al Hamly has both legal purpose and legal capacity and therefore it is legally binding.
German Intelligent Technology. (2010). Contract: Supply, installation, testing and commissioning of 1 elevator for Salem as at June 2010. Abu Dhabi: Al Mohtadi Commercial Agencies.