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Definition 

A contract may be defined as a legally binding agreement or, "A promise or set of promises which the law will enforce".



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, though in some cases the court may order performance by the party in default.

2.    . Simple contracts Contracts which are not deeds are known as simple contracts. orally or they may be implied from conduct. Contracts by deed A deed is a formal legal document signed. They are informal contracts and may be made in any way . witnessed and delivered to effect a conveyance or transfer of property or to create a legal obligation or contract.in writing.CLASSIFICATION  1.

 1. Thus in a contract for the sale of goods. The exchange of promises is enough to render them both enforceable. . the buyer promises to pay the price and the seller promises to deliver the goods. Bilateral contracts  A bilateral contract is one where a promise by one party is exchanged for a promise by the other.

is bound to do anything. No one is bound to search for the lost wallet. as opposed to a promise. where X promises a reward to anyone who will find his lost wallet. but if Y. X. The essence of the unilateral contract is that only one party. he/she is entitled to the reward. eg. . having seen the offer. Unilateral contracts  A unilateral contract is one where one party promises to do something in return for an act of the other party. recovers the wallet and returns it. 2.

ELEMENTS  Agreement  An agreement is formed when one party accepts the offer of another and involves a "meeting of the minds". .

ie. . Consideration Both parties must have provided consideration. The law will not concern itself with purely domestic or social agreements. . each side must promise to give or do something for the other. Intention to create legal relations  The parties must have intended their agreement to have legal consequences.

Consent The agreement must have been entered into freely. Consent may be vitiated by duress or undue influence. certain formalities (that is. Legality The purpose of the agreement must not be illegal or contrary to public policy. Form In some cases.  Capacity The parties must be legally capable of entering into a contract. . writing) must be observed.

Any goods or money obtained under the agreement must be returned. It means that at no time has there been a contract between the parties. they may be recovered by the original owner  .ENFORCEABILITY  Void contracts A "void contract" is one where the whole transaction is regarded as a nullity. Where items have been resold to a third party.

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

Items received under the contract cannot generally be reclaimed . Unenforceable contracts An unenforceable contract is a valid contract but it cannot be enforced in the courts if one of the parties refuses to carry out its terms.

FORMATION OF A CONTRACT A contract may be defined as an agreement between two or more parties that is intended to be legally binding. At least two parties are required. the offeror. one of them.  . makes an offer which the other.  The first requisite of any contract is an agreement (consisting of an offer and acceptance). the offeree. accepts.

OFFER  An offer is an expression of willingness to contract made with the intention that it shall become binding on the offeror as soon as it is accepted by the offeree. .

 A genuine offer is different from what is known as an "invitation to treat". which he is then free to accept or reject. ie where a party is merely inviting offers. The following are examples of invitations to treat: .

AUCTIONS  DISPLAY OF GOODS  ADVERTISEMENTS  MERE STATEMENTS OF PRICE  TENDERS  .

To make a binding contract the acceptance must exactly match the offer. The offeree must accept all the terms of the offer. .ACCEPTANCE  An acceptance is a final and unqualified acceptance of the terms of an offer.

To make a binding contract the acceptance must exactly match the offer. An acceptance is a final and unqualified acceptance of the terms of an offer. The offeree must accept all the terms of the offer .

Instead. the offeree introduces a new term or varies the terms of the offer. the reply is treated as a "counter offer".COUNTER OFFERS  If in his reply to an offer. then that reply cannot amount to an acceptance. which the original offeror is free to accept or reject. A counter-offer also amounts to a rejection counterof the original offer which cannot then be subsequently accepted .

CONDITIONAL ACCEPTANCE  TENDERS  COMMUNICATION OF ACCEPTANCE  .

where goods are dispatched in response to an offer to buy. even if the letter is delayed. eg. b) The offeror may expressly or impliedly waive the need for communication of acceptance by the offeree. See:   . then acceptance is complete as soon as the letter of acceptance is posted. destroyed or lost in the post so that it never reaches the offeror.EXCEPTIONS TO THE COMMUNICATION RULE  a) In unilateral contracts the normal rule for communication of acceptance to the offeror does not apply.Where acceptance by post has been requested or where it is an appropriate and reasonable means of communication between the parties. c) The Postal Rule . Carrying out the stipulated task is enough to constitute acceptance of the offer.

METHOD OF ACCEPTANCE The offer may specify that acceptance must reach the offeror in which case actual communication will be required.  If a method is prescribed without it being made clear that no other method will suffice then it seems that an equally advantageous method would suffice  .

there is a valid acceptance of the offer.KNOWLEDGE OF THE OFFER   An offeree may perform the act that constitutes acceptance of an offer. but for a motive other than accepting the offer. See: . (b) Where. The position seems to be that: (a) An acceptance which is wholly motivated by factors other than the existence of the offer has no effect. The question that then arises is whether his act amounts to a valid acceptance. the existence of the offer plays some part. in inducing a person to do the required act. with knowledge of that offer. however small. however.

CROSSCROSS-OFFERS  A writes to B offering to sell certain property at a stated price. The letters cross in the post. One judge said they do. by the Court in Tinn v Hoffman (1873) 29 LT 271. Five judges said that cross-offers do not make a binding crosscontract. B writes to A offering to buy the same property at the same price. (b) a contract? This problem was discussed. . Is there (a) an offer and acceptance. obiter.

TERMINATION OF THE OFFER 1. a binding contract is made and the offer ends.  2.  . ACCEPTANCE  Once an offer has been accepted. REJECTION  If the offeree rejects the offer that is the end of it.

it is ineffective. . See: Byrne v Van Tienhoven (1880) 5 CPD 344. However. REVOCATION The offer may be revoked by the offeror at any time until it is accepted. the revocation of the offer must be communicated to the offeree(s). Unless and until the revocation is so communicated.   3.

See:  Shuey v United States [1875] 92 US 73  . it is sufficient if it is done through a reliable third party.The revocation need not be communicated by the offeror personally. it appears that it may be revoked by taking reasonable steps. See:  Dickinson v Dodds (1876) 2 ChD 463.  Where an offer is made to the whole world.

then the offer automatically terminates when that time limit expires.LAPSE OF TIME  Where an offer is stated to be open for a specific length of time. Where there is no express time limit. an offer is normally open only for a reasonable time .

If the condition is not satisfied the offer is not capable of being accepted. See:  . Such a condition may be stated expressly by the offeror or implied by the courts from the circumstances.FAILURE OF A CONDITION  An offer may be made subject to conditions.

However. DEATH  The offeree cannot accept an offer after notice of the offeror's death. and there is no personal element involved. then he may accept the offer.7.  . if the offeree does not know of the offeror's death.