TUTORIAL 2 BGN 342- DR.

SURYANI BINTI AHMAD

A contract is a legally binding agreement between two or more parties that creates mutual
obligations enforceable by law. Contracts are essential in various aspects of life, including
business transactions, employment agreements, real estate dealings, and more.
 Offer: An offer is a clear expression of willingness by one party (the offeror) to enter
into a contract under specific terms. The offer must be communicated to the other
party (the offeree) with the intention that it is capable of being accepted.
 Acceptance: Acceptance occurs when the offeree agrees to the terms of the offer,
thereby creating a mutual agreement or meeting of the minds between the parties.
Acceptance must generally be communicated to the offeror, and it must be
unconditional and in accordance with the terms of the offer.
 Consideration: Consideration refers to something of value exchanged between the
parties to a contract. It could be money, goods, services, promises to perform (or
refrain from performing) certain actions, or anything else with legal value.
Consideration is necessary to validate the contract and establish that both parties are
giving and receiving something in return.
 Intention to Create Legal Relations: For a contract to be enforceable, the parties must
intend their agreement to be legally binding. In other words, the parties must
demonstrate that they intended to create a legally enforceable relationship, as opposed
to a mere social agreement or arrangement.
 Legal Capacity: Legal capacity refers to the mental and legal ability of the parties to
enter into a contract. This generally means that the parties must be of legal age and
sound mind. Minors, individuals under the influence of drugs or alcohol, and those
with mental incapacities may lack the legal capacity to enter into binding contracts.