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Definitions in business law

Offer

In business law, an offer implies a voluntary, but sometimes conditional promise that a buyer or a seller issues for acceptance by the other party and which becomes legally binding once the other party decides to accept the offer. In other words, an offer is an indication of the willingness of one of the parties to enter into an arrangement or agreement with another party through certain specified terms. The offer becomes binding when the other party agrees to accept the offer.

As an example, a person A may be willing to sell a car to another person (B). A will come up with an offer to B and it will be up to B to evaluate the offer and decide to accept or not. The offer includes a number of things namely the price of the car, the terms of payment (immediately, installments) and the means of payment (cash, cheque, pay in form). When B accepts these conditions and accepts the offer, it becomes legally binding by law.

Acceptance

In a close relationship to an offer, an acceptance shows the act of a party or entity accepting a certain deal that the other party floats to them. In business law and the law of contracts, this is done through analyzing all aspects of the offer. If the party is satisfied with the offer and agrees to it, this is called acceptance and it forms a legal bind to honor the offer accepted.

For instance, in the above example, A is the person who sells the car to B. after he gives B the conditions for the sale of the car, B has a chance to decide whether he or she will buy this car. Sometimes B might propose a change of these terms before he/she decides to accept the offer. Once he/she becomes satisfied with the offer A gives, then he goes ahead and accepts to buy the car thereby sealing this deal.

Consideration

In business law, a consideration implies something which has monetary value that is exchangeable voluntarily with an act, a promise, goods or even services (Weitzenbock 2012, p.4). This could be an asset or portfolio, or even cash itself. It can be anything that has some form of value that is promised to a certain party by another entity. In other words, it is an exchange of something that has some form of value with another person or something else.

As an example, when A promises to buy a car and gets into a contract to buy the car from B at a price of $2000, the consideration on the part of A becomes $2000 and the consideration on the part of B is the car itself.

Forbearance to sue

This is the act of refraining an act that one has been obligated by law to do. In other words, it forms a delay in the enforcement of a legal right. This is done usually for a certain period of time. when one party breaches the contract and attempts to extend the contract for a certain period of time, the other party has a right to sue.

As an example of forbearance to sue, assume that B did not honor the agreement that he signed with A. A then has the option of taking legal action against B. using the concept of forbearance to sue, A will forbear from taking the legal action, thereby giving B some more time to make good his payment. After that, when A decides to sue B, he would then have a more concrete case against B.

Reference

Weitzenbock, EM 2012, ‘English Law of Contract: Consideration’, Retrieved from

http://www.uio.no/studier/emner/jus/jus/JUS5260/v12/undervisningsmateriale/Consideration.pdf