Business_Essentials

School Name: American InterContinental University Student Name: Tameka Nickerson Course Name: BUSN150-1102A-167 Instructor Name: Douglas Jones Assignment Issue Date: 05-08-2011 Assignment Due Date: 05-15-2011 Business Essentials The four elements of a valid contract include: Meeting of the Minds, Offer and Acceptance, Mutual Consideration, and Performance/Delivery. Meeting of the Minds is when the parties involved (in the contract) have a mutual understanding…face to face regarding the details of the contract. Offer and Acceptance, is an offer (stated in the contract) to another party, who then accepts the offer. Mutual Consideration simply means, in order for the contract to be valid, the parties involved must exchange something of value. Performance/Delivery is the action contemplated (by the contract) must be completed in order to be enforced. According to Jaceson Maughan, the four elements of a valid contract include: “At least two separate parties entering into an agreement. The parties are qualified to agree to the terms, and conditions in the contract. Both parties are receiving consideration, or value from the agreement. The contract is created for legal activities.” According to West’s Encyclopedia of American Law, the objective theory of contracts is “A principle in U.S. law that the existence of a contract is determined by legal significance of the external acts of a party to a purported agreement, rather than by the actual intent of the party.” In other words…a legal concept that a binding agreement exists between two or more parties if a reasonable person would be judged, and that an offer has been made, and accepted. This theory applies to this case, because Pepsi Co. never entered into an agreement with Mr. Leonard. It was simply an advertisement. This is why the court held that there was not a valid agreement. In my opinion, advertisements are not considered offers, simply because they are invitations to consider buying a product. An example of an advertisement that would be considered an offer is one that includes the phrase “first come, first serve”, it also includes a price, and a place to come accept the offer. In order to be entitled to collect a reward in a unilateral contract the person has to have knowledge of the reward offer prior to completing the requested act. The person must also perform the requested act. Mr. Leonard did in fact perform the requested act, but (the question is) did he have knowledge of the reward offer prior to completing the requested act. David Kelly (1998) states, “English law does not enforce gratuitous unless they are made by a deed.” There was no legal binding agreement between Leonard, and Pepsi Co. According to Pepsi Co. it was simply a misunderstanding! References Retrieved from: D. Kelly (Oct. 1998), “Formation of Contracts” www.2accaglobal.com/archive J. Maughan, “What are the four Elements of a Valid Contract” www.life123.com/career-money/business-law/contract Wall Street Journal (Aug. 1999), “Seattle Man Loses in Battle with Pepsi for Harrier-jet prize” West’s Encyclopedia of American Law, www.enotes.com Wikipedia, www.wikipedia.com/businesscontracts