Entering into a business relationship with
another party is a serious matter. Business setup consultants in Dubai
recommend that one should not enter into an agreement carelessly with complete
trust - especially without a contract.
Business contracts are legally binding written
agreement between two or more parties. It provides clarity in the rights of
parties, prevents misinterpretation of communications, and protects a party’s
interests and asset values.
Elements of a Contract
Before discussing the process of preparing a
business contract, an attorney in Dubai explains
the key elements a contract should contain to be legally valid.
●
Offer and Acceptance
An offer refers to
something of value presented by one party. Acceptance means that the offer
presented was properly acknowledged, agreed, and accepted by the other party.
These elements go hand-in-hand.
●
Consideration
Consideration is the
value both parties receive for entering into the contract. It can be in the
form of money or effort, a right, a promise to perform service, or even an
agreement over not doing something.
●
Mutuality or Intention
This simply means
that the parties involved in the contract had “a meeting of the minds” over the
agreement. They have understood and agreed to the terms of contract.
●
Capacity
Not everyone is
eligible to form a contract. Minors and people with unsound minds cannot enter
into any valid contracts.Capacity applies to people who have the legal ability
to sign a contract. 18 years old is stated as the age of a major.
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