Download Contract Law - Law of Contract - Lecture Slides and more Slides Contract Law in PDF only on Docsity! 1 No chatting during this Lecture Switch off Mobile Telephones Raise your hand if you have a question. Do not eat food in this classroom. Take Notes Contract Law A contract is an agreement that is legally binding; a promise that can be enforced in the courts. In order for the courts to recognise an agreement as a contract, four main elements must be present: •Offer and acceptance •Consideration •Capacity to make a contract •Intention to create legal relations Offer and Acceptance These two points are at the heart of any contract and so there are various “rules” about offer and acceptance. Firstly, the law distinguishes between an offer and “an invitation to treat”. An invitation to treat is where the other person is inviting you to make an offer, so that he can consider it and accept or reject it. Invitation to Treat Three important situations which are always invitations to treat and not offers are: •Articles for sale on display in a shop window or on a shelf in a store; •Advertisements of items for sale in newspapers, magazines or catalogues; •Auction sales Rules about Offers 1) The offer must be certain. 2) The offer may be by any method – it does not have to be in writing. 3) The offer can be to anyone. 4) The offer must be communicated before it is effective. 5) The offer must still be in existence when it is accepted. Rules about Acceptance The main rule about an acceptance is that it must agree to all the terms of the offer. If it does not agree to the terms of the offer it is not an acceptance but a counter-offer. If an acceptance is communicated by post, then the acceptance is assumed to have been made the moment the letter is posted. Docsity.com 2 Consideration Consideration means that both parties must put something into the contract. The consideration does not have to be money, but it must have some value. The value of the consideration does not have to be equal as long as both parties are happy with the agreement. Rights of Third Parties There used to be a rule that a third party had no rights under a contract made by two other people – a concept known as privity of contract. Contract (Rights of Third Parties) Act 1999 now gives the third party the right to claim, provided that •The contract says that he has the right; or •The contract appears to give the third party a benefit. Intention to Create Legal Relations The courts may sometimes decide not to enforce a contract, because at the time the parties made their agreement, they did not intend it to be legally binding. Social & Domestic Agreements: the court will normally assume that the parties did not intend to be legally bound. Business Agreements: the court will presume parties intended the agreement to be legally binding Capacity of Minors A minor is anyone under 18. Minors can make contracts – this is necessary for everyday life. There is no legal minimum age for being able to make a contract. However, there are some special rules about enforcing contracts against minors. The law divides contracts made by minors into 2 types: 1. Binding contracts 2. Voidable contracts Binding Contracts These are recognised as valid contracts, which the other party can enforce against the minor. There are 2 categories of binding contracts: 1. Contracts for necessaries 2. Beneficial contracts of service Once the minor has made a binding contract he must go through with it or the other party can sue the minor for breach of contract. Voidable Contracts These contracts cannot be enforced against a minor. The minor has the right to choose whether or not he/ she wishes this type of contract to remain in force. If a minor decides not to continue with a voidable contract, the other party cannot sue the minor for breach of contract. Docsity.com
