Topics: Contract, Contract law, Consideration Pages: 6 (2019 words) Published: February 21, 2013
Law comes to taken effect when a contract is formed between parties such as consumer and company or business to business or between family and or friends. In this report we will analyze the seven criteria for a contract to be effective in Singapore which will help to protect the interests of the innocent parties and to ensure justice will be accorded to the parties not adhering to rules. 1. Offer

Offer is a definite agreement made with intention to be bound when offer is fully accepted by both parties. Vague offers are usually not good enough to be taken into considerations for a contract to be bounded. There is a need to distinguish and differentiate between an offer and invitation to treat. Invitation to treat is defined as an invitation to someone to make an offer for a product or service. There was once a case where the offeror offers to buy the horse if it was Lucky was held by courts to be too vague and hence concluded as there was no offer being made. [1]

Acceptance is defined as fully agreed to all the terms and conditions of the offer, which means the offer is to be accepted as it is without any modifications, amendments or changes being made. In situations where modifications, amendments or changes are being made to the offer, it will be considered as counter-offer and the first offer will eventually be considered as void. There was a famous case, W was selling property to P, a contract with acceptance copy form was given to P and P filled up the acceptance copy form with additional words added to one of the contract term in it. Thus the court held that the adding of words had caused changes to the original terms of offer and P’s action was a counter-offer, not acceptance to W’s offer. [2, 3] Acceptance must be accepted in positive manner and not passively. Keeping silence does not indicate any acceptance of offer. There was a case, where plaintiff offered to the horse from the defendant and informed he would consider the deal is on if he did not hear from the defendant. It was held that in such situations, there could not be acceptance by silence and offeror cannot force acceptance when the offeree does not reject the offer. [4]

2. Intention to create legal relations
Evidences are required to prove that there is an intention existed between two parties to enter into legal relations. The court will objectively examine the parties’ statements and determine their intentions and two types of presumptions are applied in the event if there is no express agreement or when the intention is unclear. 1) Relationship such as social, domestic, matrimonial or family members or arrangements whereby it is alleged that there is no intention to enter into legal relations between parties unless the presumption is rebutted to the contrary. There was a famous case between a married couple, the husband got attached to another lady and leaving the wife with the kids and property. The husband paid £40 to the wife monthly and it was agreed that the wife would have to pay the outstanding mortgage loan for their house. This agreement was written down and accepted by both parties that upon mortgage payment being cleared off, the husband will agree to transfer the property into the wife’s name. However the husband refused to transfer the house. The wife sued him. The court assumed that there is evidence for the two parties to enter into the contract and it was more than a domestic arrangement being made as they were separated at the point of entering into the contract. [5]

2) Business or commercial relationships or arrangements whereby it is alleged that intentions are found to enter into legal relations between parties unless the presumption is rebutted to the contrary. An example of documents to indicate financial stability of a company and no intention to create legal relations because it is merely statements of current factual of the company and does not represent a promise to future...

References: 1. Gunthing vs. Lynn (1831)
3. Hyde vs. Wrench (1840)
5. Meritt vs. Merritt (1970)
7. Re McArdle (1951)
9. North Ocean Shipping vs. Hyundai Construction (The Atlantic Baron) (1979)
11. Nash v. Inman (1908)
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