Law Assignment

Q1. Discuss the elements to the formation of the contract between the parties.

Contract

A contract is created when two or more parties come to a similar consensus on a matter without any additional terms or conditions, then it can legally binding contract. It takes several requirements for a contract to be legally binding.

Elements of a contract

1.Offer and acceptance

First requirement, takes two steps that is offer and acceptance. An ‘’offer’’ is an expression of willingness to make a contract on specific terms, and is made with the intention that will be binding on the parties once it is accepted by a person whom is being addressed as an ‘’offeree’’.

There are three requirements for an  “offer’’. Firstly it is the terms of exchange. Secondly it is indicated that the person is willing to make the offer to be bound by the contractual terms unconditionally and lastly, the offeree has the power to bind the contract so that the offerer cannot retract the contract once the offeree has accepted. For acceptance to occur or the person given the offer must accept it without adding on or changing any part of the offer. It must be said or written to the offeror explicitly. Silence cannot be taken as a form of acceptance.(Felthouse v Bindley 1862).

2.Consideration

The second element needed in creating a contract is consideration, where the rule is a promise that is only enforceable if it’s supported by a consideration. ‘’Consideration’’ is valuable in the eyes of the law, as it can only be exchange for a promise. Consideration is mainly based on the concept of detriment or factual benefit as it serves the same purpose of consideration. The case of (Williams v Roffey 1990), due to consideration and it is enforceable the judge ruled that the promise was made.

3.Intention to create legal relations

With both parties there must be an intention to create legal relations. It is unlikely that the law has an intention in domestic or social settings. For example a husband promises his wife that he would buy her a Gucci bag for making him coffee everyday for a week, it is unlikely to bound the legal contract (Balfour v Balfour 1919). But agreements in a commercial context or a business the law will consider otherwise.

4.Express terms

Express terms are terms that has been explicitly mentioned and agreed upon by both parties while the contract is being made, this can be done in writing or by mouth. The people 2 or more that are included in the contract must be free to give their consent. If one party is under duress or is not mentally stable during the creation of the contract and goes along with the creation of the contract, the contract might not be able to get its recognition in the future and can be torn apart.