Formation of a Contract
BUS103 Assignment
Ellyn Hurst
Florentina Benga
Wednesay 4.00 – 5.00
Word count: 1418
A contract is an agreement containing promises made between two or more parties with the intention of creating legal rights and obligations enforceable in a court of law. There are three essential elements that must be proven to establish a contract. The first element that must be established is whether or not there was an agreement between the parties. There must be an offer proposed by on party, and acceptance by the other. The second element is whether or not there was the intention to create legal relations. Each party must intend to create legally enforceable obligations in the form of a contract between one another. The third element, which needs to be proven, is that there was consideration. There must be something of value passing from one party to another in return for a promise to do something. Once all these three elements have been proven, a contract can then be formed.
Agreement - Sarah
The first part in determining an agreement is the offer. An offer is a statement or conduct showing intention to be bound, without further discussion or negotiation, on the acceptance of terms stated by the offeror, who is the person making the offer. An offer differs from an invitation to treat, as unlike an offer, it cannot be accepted, it is only a willingness to start the offer and acceptance process. This was established in the case of Partridge v Crittenden (1968) 2 AII ER 421. An offer can be made to one person, or the world at large as found in the case of Carlill v Carbolic Smoke Ball Co. (1983) 1 QB 256. An offer can also be terminated, although this must occur before the acceptance. An offer can be terminated by revocation, lapse in time or rejection. A counter offer can also terminate an agreement. A counter offer is defined as an express or implied rejection of the offeror’s original offer by the offeree. In the case of Sarah and Rebecca, an offer was
Ellyn Hurst
Florentina Benga
Wednesay 4.00 – 5.00
Word count: 1418
A contract is an agreement containing promises made between two or more parties with the intention of creating legal rights and obligations enforceable in a court of law. There are three essential elements that must be proven to establish a contract. The first element that must be established is whether or not there was an agreement between the parties. There must be an offer proposed by on party, and acceptance by the other. The second element is whether or not there was the intention to create legal relations. Each party must intend to create legally enforceable obligations in the form of a contract between one another. The third element, which needs to be proven, is that there was consideration. There must be something of value passing from one party to another in return for a promise to do something. Once all these three elements have been proven, a contract can then be formed.
Agreement - Sarah
The first part in determining an agreement is the offer. An offer is a statement or conduct showing intention to be bound, without further discussion or negotiation, on the acceptance of terms stated by the offeror, who is the person making the offer. An offer differs from an invitation to treat, as unlike an offer, it cannot be accepted, it is only a willingness to start the offer and acceptance process. This was established in the case of Partridge v Crittenden (1968) 2 AII ER 421. An offer can be made to one person, or the world at large as found in the case of Carlill v Carbolic Smoke Ball Co. (1983) 1 QB 256. An offer can also be terminated, although this must occur before the acceptance. An offer can be terminated by revocation, lapse in time or rejection. A counter offer can also terminate an agreement. A counter offer is defined as an express or implied rejection of the offeror’s original offer by the offeree. In the case of Sarah and Rebecca, an offer was
References: Adams v Lindsell (1818) 106 ER 250 Carlill v Carbolic Smoke Ball Co. (1983) 1 QB 256 Cohen v Cohen (1929) 42 CLR 91 Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd (1915) AC 847 Felthouse v Bindley (1862) 142 ER 1037 Harvey v Facey (1893) AC 552 Partridge v Crittenden (1968) 2 AII ER 421 R v Clarke (1927) 40 CLR 227 Roscola v Thomas (1842) 3 QB 234