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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.

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

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

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

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

ie. . 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. The law will not concern itself with purely domestic or social agreements. Consideration Both parties must have provided consideration. .

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

Where items have been resold to a third party. 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.ENFORCEABILITY  Void contracts A "void contract" is one where the whole transaction is regarded as a nullity. they may be recovered by the original owner  .

If goods have been resold before the contract was avoided. insofar as this is possible. Anything obtained under the contract must be returned. 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. the original owner will not be able to reclaim them .

 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. Items received under the contract cannot generally be reclaimed .

accepts.  .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. the offeree. makes an offer which the other. one of them.  The first requisite of any contract is an agreement (consisting of an offer and acceptance).

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. .

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

AUCTIONS  DISPLAY OF GOODS  ADVERTISEMENTS  MERE STATEMENTS OF PRICE  TENDERS  .

To make a binding contract the acceptance must exactly match the offer.ACCEPTANCE  An acceptance is a final and unqualified acceptance of the terms of an offer. The offeree must accept all the terms of the 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". A counter-offer also amounts to a rejection counterof the original offer which cannot then be subsequently accepted . then that reply cannot amount to an acceptance. which the original offeror is free to accept or reject.COUNTER OFFERS  If in his reply to an offer.

CONDITIONAL ACCEPTANCE  TENDERS  COMMUNICATION OF ACCEPTANCE  .

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

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  .

the existence of the offer plays some part. there is a valid acceptance of the offer. however. (b) Where. in inducing a person to do the required act. See: . 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. however small. The question that then arises is whether his act amounts to a valid acceptance. with knowledge of that 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.

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

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

Unless and until the revocation is so communicated. it is ineffective. .   3. See: Byrne v Van Tienhoven (1880) 5 CPD 344. 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). However.

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

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. an offer is normally open only for a reasonable time . Where there is no express time limit.

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. See:  . If the condition is not satisfied the offer is not capable of being accepted.

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

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