June 30, 2014
Per Seaquist (2012), a valid and enforceable contract consists of five elements. Those elements are offer, acceptance, consideration, capacity and legality. Assuming that the contract set forth by Fabulous Hotel possesses each of the five characteristics, yes, the contract is enforceable, depending on other mitigating factors . To better understand concept of the five elements, we will delve into each element. There are usually two parties to a contract. They are the offerer and the offeree. For the purpose of this assignment. Fabulous Hotels is the offerer and I am the offeree with Fabulous Hotels being party making the offer and me having the power of acceptance. In this case, Fabulous Hotels has offered me a job, as chef, at the hotel for a period of two years. Per Lawrence (2013), there are, furthermore, three elements to an offer. He says that the offer must be communicated, committed and have definite terms. The offerer must communicate the offer to the offeree, the offerer must be bound to the offer and the offer must be specific in terms. After an offer is made, the offeree can either reject, counteroffer or accept. If the offeree rejects the offer, he simply says, “No,” and the offer is not accepted. This simply means that the offeree does not accept the terms of the offer, at which point the offer is terminated. The offeree may also counteroffer. When an offeree counteroffers, he is still rejecting the terms of the offer, but he negotiates new terms that are more suitable to what he wants. A counteroffer replaces the original offer and becomes the primary offer with no returning to the original. Lastly, before acceptance, the offerer has the power to revoke the offer.
Given that the offer was not rejected or revoked, the offerer now accepts the terms of the offer or possible counteroffer. According to Seaquist (2012), acceptance is the element of a contract that starts contract formation. Under common law, the mirror image rule applies to acceptance. The mirror image rule merely says that the original terms of the offer set forth by the offer are the terms that must be accepted by the offeree. If the offeree deviates away from those terms, then he has said to have counter offered. As stated by Seaquist, a counteroffer is not an acceptance.
Acceptance under the Uniform Commercial Code (UCC) is slightly different from acceptance under common law. The mirror image rule is not required under UCC. According to Seaquist, (2012)” if the offeree changes the terms, there may still be a contract.”(p. 9.2) Since the UCC deals with sale of goods, then my contract with Fabulous Hotel is under common law and not the UCC. I am providing a service to Fabulous Hotel.
Consideration is the element that follows acceptance. Consideration basically says that when a person promises you to do something or give you something in return for you doing something that you are not legally bound to do, then you have an enforceable contract. For example, if Fabulous Hotel had promised me $1500 if I baked them a dozen cakes, then them offering me the $1500 is the reason for me making the cakes and me making the cakes is their reason for giving me $1500. If they had told me they would give me $1500 because I’m a great for being a great chef and in return I baked a dozen cakes, then lawfully, Fabulous Hotel does not owe me anything.
All parties to a contract must be mentally competent. This means that they must have capacity, or the mental capacity at the time of entering into a contract. Lacking mental capacity can be in the form of a mental illness or being deemed insane by a court of law, or it could mean a minor who does not have the mental capacity to make such decisions. The only way these individuals can enter into a contract is through a guardian. Any insane…