Business Law - Contract Law
3. Contract Law
“Is My Agreement an Enforceable Contract?”
The Law of Contract involves answering 4 questions: (1) Is my agreement an enforceable contract?
Are all of the elements of a contract present.
(2) If so, what does it require me (and the other party) to do?
- What “promises” have become terms of the contract.
(3) Can I get out of it (without paying some form of penalty)?
- Was the formation of the contract defective in some way (ie were there any ‘vitiating elements’ present).
(4) If not and I want to terminate it anyway, how can I – and what penalties might I incur?
- How can contract come to an end and what remedies are available to a party not in default.
Contract: An agreement which the law will enforce.
Requirements for Validity
In most cases – contracts do not have to be written. They can be: * written; * partly written and partly oral; * wholly oral; or * implied from the way the parties behave.
Elements of a Contract
Offer Acceptance Consideration Intention to be bound
Mutuality Capacity Legality
Offer: A promise to do (or not to do) something – together with an intention to be contractually bound on acceptance by the other party.
OR A clear statement of the terms on which an offeror is prepared to be contractually bound.
Offers can be made to: one person; an identified group of people; or the world at large.
Offers to the World at Large: Offers not directed to any specific person or persons but to anyone who becomes aware of them (other than those – if any – who are EXPRESSLY excluded from the offer).
Invitations to Treat: Statements made to others inviting THEM to make you an offer.
Examples: advertisements and circulars; displays of goods in shops; calls for bids at auctions; and calls for tenders.
PUFF: Obviously far-fetched statements made to induce a contract but not intended to form part of the contractual obligation.
Termination of Offers: Revocation by the offeror;
“Is My Agreement an Enforceable Contract?”
The Law of Contract involves answering 4 questions: (1) Is my agreement an enforceable contract?
Are all of the elements of a contract present.
(2) If so, what does it require me (and the other party) to do?
- What “promises” have become terms of the contract.
(3) Can I get out of it (without paying some form of penalty)?
- Was the formation of the contract defective in some way (ie were there any ‘vitiating elements’ present).
(4) If not and I want to terminate it anyway, how can I – and what penalties might I incur?
- How can contract come to an end and what remedies are available to a party not in default.
Contract: An agreement which the law will enforce.
Requirements for Validity
In most cases – contracts do not have to be written. They can be: * written; * partly written and partly oral; * wholly oral; or * implied from the way the parties behave.
Elements of a Contract
Offer Acceptance Consideration Intention to be bound
Mutuality Capacity Legality
Offer: A promise to do (or not to do) something – together with an intention to be contractually bound on acceptance by the other party.
OR A clear statement of the terms on which an offeror is prepared to be contractually bound.
Offers can be made to: one person; an identified group of people; or the world at large.
Offers to the World at Large: Offers not directed to any specific person or persons but to anyone who becomes aware of them (other than those – if any – who are EXPRESSLY excluded from the offer).
Invitations to Treat: Statements made to others inviting THEM to make you an offer.
Examples: advertisements and circulars; displays of goods in shops; calls for bids at auctions; and calls for tenders.
PUFF: Obviously far-fetched statements made to induce a contract but not intended to form part of the contractual obligation.
Termination of Offers: Revocation by the offeror;