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Law of contract
| Term | Definition |
|---|---|
| Contract | A legally binding agreement between two or more people that is enforceable by law |
| Agreement | This is when an offer is accepted, it can be in writing (e.g purchase of land) oral (e.g. auction) or implied by conduct (at a checkout). An offer is terminated if there is a counter offer, the offer is rejected or there is a revocation. |
| Invitation to treat | An invitation to make an offer (e.g. price tag/shop display ). If a price is wrong it can be corrected and does not have to be sold at the mistaken price. |
| Intention | A willingness and knowledge on both sides that they are entering into a contract. E.g. two people arrange to meet up, one doesn't turn up, the other can't sue them as there was no intention to form a contract. |
| Consideration | What one person must give to another as there must be some kind of exchange. |
| Capacity | The legal ability to enter into a contract, exceptions include: - under18s - persons under the influence of drugs/alcohol - bankruptcy - diplomat _ ultra vires |
| Consent | The contract must be made voluntarily, it must not be entered in under duress and both parties must agree to what is in the contract. |
| Legality of form | The manner in which a contract is drawn up (e.g oral, in writing or implied by conduct). Certain contracts must be in writing (e.g. sale of property) |
| Legality of purpose | The contract must not break any laws (e.g. agreements to commit a crime will not be upheld in court). |
| Performance | Both parties carry out their side of the contract (e.g. a builder builds a house and the owner pays him). |
| Agreement (termination of contract) | Both parties agree to end the contract (e.g. the homeowner decides not to go ahead with the construction and the builder agrees to cancel the contract). |
| Frustration | An unforeseen event makes it impossible to carry out the contract (e.g. the death of one of parties). |
| Breach | One party breaks an essential condition to the contract (e.g. the builder stops construction before it is complete). |
| Remedies for breach of contract | 1. Rescind the contract (abandon it) 2. Damages (sue for compensation) 3. Specific performance (the court orders the original contract be carried out) |
Created by:
ashlinnviret
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