You are on page 1of 12

INTRODUCTION

LAW OF
CONTRACT

In other words… “A promise or set of promises which the law will enforce”. . though in some cases the court may order performance by the party in default.What is a Contract ? • A legally binding agreement. • The agreement will create rights and obligations that may be enforced in the courts. • The normal method of enforcement is an action for damages for breach of contract.

.Notion of Free Contract The parties must have entered into the agreement freely. The purpose of the agreement must not be illegal or contrary to public policy.

Form of Contracts 1) Written 2) Oral 3) Partly oral and written .

2 classes of Contract Contracts by Deed • A deed is a formal legal document signed. Simple contracts • Simple contracts are informal contracts and may be made in any way – in writing. witnessed and delivered to effect a conveyance or transfer of property or to create a legal obligation. orally or they may be implied from conduct .

Bilateral & Unilateral Bilateral contracts • A promise by one party in exchanged for a promise by another party • A one to one contract Offeror The person who make the offer Example : Sale of goods contract • The Buyer promises to pay the price • The Seller promises to deliver the goods Offeree The person to whom the contract was made .

Unilateral contracts • A promise by one party in exchanged for an action by another party • A one to all contract 1 Offeror Many Offerees Example : X promises a reward to anyone who will find his lost wallet. having seen the offer. he is entitled to the reward. X bound himself to the promise. . but no one is bound to search for the lost wallet. recovers the wallet and returns it. But if Y.

The law will not concern itself with purely domestic or social agreements. another party accepts the offer and both achieve consensus ad idem (meeting of the minds) 2) Consideration Both parties must have provided consideration. . ie. 3) Intention to create legal relations The parties must have intended their agreement to have legal consequences.Essential elements of a Contract 1) Agreement One party make the offer. each side must promise to give or do something for the other.

4) Capacity The parties must be legally capable of entering into a contract. illegality . mistake. misrepresentation. 5) Absence of Vitiating factors Absence of factors that are going to invalidate a contract. ie : duress or undue influence.

. as though as there has been no contract between the parties. • Where items have been resold to a 3rd party.Enforceability Void contracts • the whole transaction is regarded as a nullity. they may be recovered by the original owner. • Any goods or money obtained under the agreement must be returned.

. • Anything obtained under the contract must be returned.Voidable contracts • A voidable contract will operates as a valid contract unless and until one of the parties takes steps to avoid it. the original owner will not be able to reclaim them. insofar as this is possible. • If goods have been resold before the contract was avoided.

End .