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PEARSON (PEARSON)
Business 2010 QCF
Unit 21 - Aspects of Contract and Business Law
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Kojar Ahmed M1
Written contracts are usually for things such as the sale of land or credit agreements, as well as
others. Written contracts are arguably the most effective and solid type of contract as they are
physical proof of the agreement between the seller or organisation. A deed is similar to a written
contract in that it is a formally written legal document, however it differs because it is used more for
things such as house sales, mortgages or vehicle sales. A written contract is likely to be used by
phone companies like Three because they are solid proof and evidence that a contract has been
made, it is also easier for the companies to track contracts and identify whether they have actually
been made. A written contract also allows the company to put their own terms and conditions that a
consumer must abide by if they have agreed to a contract with Three. This may also be a drawback as
it allows some companies to hide some terms that try to outsmart the consumer.
A deed is a similar, formal written document that is agreed upon by two people, however it is
unlikely to be used by phone companies because deeds are mainly used to identify ownership, this is
more likely to be used for car purchases, mortgages and land ownership. A positive aspect of a deed
is they 100% prove ownership.
A verbal contract is a legally binding contract that has been made via word of mouth or a person’s
conduct. For example, if someone were to buy a product from a local shop, they have automatically
formed a contract due to their conduct between them and the shop. Verbal contract are riskier
because there is no legal evidence to back them up. As well as this, making a verbal contract
between two people may be harder to prove in a court of law. Verbal contracts would not be used
by a phone company such as Three because they would be unable to prove one has been made if it is
ever necessary.
Counter offers are when a customer or individual attempt to vary from the terms of the offer. For
example, if a Three customer offered £20 a month instead of £30 for a contract Three had available,
Three would have the option to either accept or deny the counter offer. These types of offers will
usually fail as phone contracts are usually set prices. Counter offers can sometimes be used in less
formal environments and have the ability to actually decrease set prices in these instances, although
they are unlikely to be accepted by larger companies that deal in standard form contracts.
Capacity is another element of a contract which is designed to help protect young people under the
age of 18 and the mentally disordered, as well as any individuals who may be drunk or drugged.
Capacity is simply the mutual understanding that both parties involved in the contract are aware that
a contract is being made and what is involved in the contract. Minors, or those under the age of 18,
are protected by law from any unfair trading between them and a business. This is due to their
presumed inexperience and is done to help prevent young people from getting conned or agreeing to
a contract with terms they are unfamiliar with. This is a very beneficial aspect because it prevents
any unlawful activity by large companies to con unsuspecting or unaware individuals. Three must
abide by these rules to prevent those under 18 from agreeing to a contract they have not read etc.
For most contracts, a communication of offers must be made by the customer or party, is can be
done through either written or verbal methods. As well as this, it is required that both parties are
aware of what they’re getting into, meaning the terms of the written or verbal contract must not be
vague or misleading. The only exception to this rule is known as a “Reward Case”. In this case, a
communication of offer can be made to a whole group of people or even the world, this can happen
when someone posts a lost dog poster in a public area and offers a reward for finding it.
In order for an offer to be fully accepted by an individual, the factors of acceptance must be present.
These factors are that the offer has been communicated to the customer and the customer has
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