LO1 Understand the elements of a valid contract in a business context1.1 Explain the importance of the essential elements required for the formation of a valid contract. Several essential elements are necessary in the formation of a contract, namely offer and acceptance, capacity, consideration, intention to create legal relations, consideration and privity of contract. Offer and Acceptance An offer is the willingness to contract with a specific set or conditions formulated by the offeror which, if accepted, by that person or individual is bound by a contract. Acceptance An acceptance is the absolute agreement to a contract and its terms as well as to its offer. The contract must reflect the original offer made from the outset.CapacityThis is the total completion of acceptance of the terms of the contract by both parties without any legal restrictions or other discrepancies.ConsiderationThis is the exchange of certain goods or services which is a part of the contractual agreement by both parties. Contract Lien This is a preventive element while it acts as a guarantee to declare that only the [parties involved in the contract are liable to sue each other in case of breach of contract. This means that no third party can be involved in the contract for prosecution or making claims other than the two parties involved in the contract.1.2 Discuss the impact of different types of contractsThere are several types of contracts namely: Bilateral and Unilateral Expressed & Implied  Valid and enforceable  Voidable and void  Executed and enforceable Contracts are in the form of oral, written, face to face. Each of these forms has its respectable impacts. When executing a contract face to face, middle of paper......considered legitimate and reliable. Contracts can be written, verbal and face to face; These contracts have very important terms and conditions and, in case of violation, they come with different consequences, serious or insignificant. Neglect of contracts and agreements can cause serious damage to a person's property, reputation or livelihood. In a business format, vicarious liability occurs all the time when an employee degrades a company by tampering with its products or establishing misconduct under the company's name and brand outside of the presence of the company (business ownership). Laws play a very important role in contracts because it is through this means that justice can be delivered with reason and understanding of the legal requirements of that country. There are different types of contracts for different types of situations and agreements.