Question

Define contracts and why are contracts the building blocks of business.

Answer 1

Contract can be defined as the voluntary arrangement that exist between two or more parties that enter into a legal agreement.. Contract can be in writting or in oral form.

Contracts are the building blocks of business because it consist of offer, acceptance, consideration and intention of legal consequences. Consideration forms the important part of the contract which consist of value such as money, payment or the cost of the promises of performance agreed to in a contract. A valid contract will have consideration part for both the parties where one party promises to do something in return for a promise from the other party to provide some benefit. It prevents the occurrence of fraud and bind the parties for successful performance of the agreement by law.