Contract Law
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HND BUSINESS CONTRACT LAW | Aspects of Contract and Negligence | | |
HND BUSINESS - CONTRACT LAW
Case 1
1.1 Introduction
A contract is a legally binding agreement between two or more people in writing or in words that includes a valid offer and acceptance.
The essential elements of a binding contract are: 1. Offer and Acceptance
2. Consideration given by both sides
3. The intention to create legal relationship
4. Privity
5. Capacity
1.1a Offer
An offer is a proposition put by one person to another person made with the intention that it shall become legally binding as soon as the other person accepts it. When the offer is accepted a contract is formed between the persons involved. An offer is also, capable of being converted into an agreement by acceptance and must consist of a definite promise to be bound provided that certain specified terms are accepted. Smith v Hughes (1871) introduces the objective test that decides whether an offer has been made.
Smith plc. V Jones Ltd 2012
On 1 October Jones Ltd made an offer to Smith plc. by post to service their photocopying machine for £10,000 per year and told Smith to reply by post On 4 October Jones Ltd received an offer from Watson & Co to do the service for £9,000.
5 October Jones made a counter offer to Watson by offering to pay them £8,000 instead of the proposed amount which Watson accepted.
6 October Smith plc. received the letter of the offer of 1st October made by Jones Ltd
6 October Smith plc. received an email of withdrawal of the offer of 1st October by 10.45 from Jones Ltd but not read until 5pm same day
6 October Smith PLC accepted the offer at 11 am when they posted the letter back to Jones.
Jones Ltd and Smith PLC formed a contract on the 6th of October at 11 am when the letter of acceptance was posted as the postal rule have to be
HND BUSINESS CONTRACT LAW | Aspects of Contract and Negligence | | |
HND BUSINESS - CONTRACT LAW
Case 1
1.1 Introduction
A contract is a legally binding agreement between two or more people in writing or in words that includes a valid offer and acceptance.
The essential elements of a binding contract are: 1. Offer and Acceptance
2. Consideration given by both sides
3. The intention to create legal relationship
4. Privity
5. Capacity
1.1a Offer
An offer is a proposition put by one person to another person made with the intention that it shall become legally binding as soon as the other person accepts it. When the offer is accepted a contract is formed between the persons involved. An offer is also, capable of being converted into an agreement by acceptance and must consist of a definite promise to be bound provided that certain specified terms are accepted. Smith v Hughes (1871) introduces the objective test that decides whether an offer has been made.
Smith plc. V Jones Ltd 2012
On 1 October Jones Ltd made an offer to Smith plc. by post to service their photocopying machine for £10,000 per year and told Smith to reply by post On 4 October Jones Ltd received an offer from Watson & Co to do the service for £9,000.
5 October Jones made a counter offer to Watson by offering to pay them £8,000 instead of the proposed amount which Watson accepted.
6 October Smith plc. received the letter of the offer of 1st October made by Jones Ltd
6 October Smith plc. received an email of withdrawal of the offer of 1st October by 10.45 from Jones Ltd but not read until 5pm same day
6 October Smith PLC accepted the offer at 11 am when they posted the letter back to Jones.
Jones Ltd and Smith PLC formed a contract on the 6th of October at 11 am when the letter of acceptance was posted as the postal rule have to be