...Law Of Contract Definition and Nature A Contract is an agreement between two parties that creates an obligation to perform (or not perform) a particular duty. According to Section 2(h) of the Indian Contact Act of 1872, A Contract is - “An Agreement enforceable by law” In other words, A contract is a binding legal agreement. Thus we can say: Agreement + Enforceability by law = Contract Formation of Contract PROPOSAL/OFFER [SECTION 2(a)]: A person is said to make a proposal when “he signifies to another his willingness to do or to abstain from doing anything with a view to obtaining assent (Agree) of that other to such act or abstinence” Example: 1. Rima offers to sell her Law books to Rony . Here, Rima is offering or giving a proposal to Rony. If Rony accepts a Contact is formed. Proposal & Promise Section 2(b) of the Contract Act 1872 states that, “A proposal (Offer) when accepted becomes a promise” The person making the proposal is called the “promisor” (Offeror), and the person accepting the proposal is called the “promisee” (Offeree). [section 2(c)]. When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing something, such act or abstinence or promise is called a consideration for the promise. [section 2(d)]. Consideration is an important element of a Contact Agreement Thus...
Words: 4434 - Pages: 18
...13 MBA 16 – Business Law & Practice Module 01 - Law of Contract Coverage of: • Law of Contract: Definition, Essentials • Types of Contracts • Offer – Definition & Essentials • Acceptance - Definition & Essentials • Consideration – Definition & Essentials, Exceptions • Capacity of Parties • Free Consent • Quasi Contract • Legality of Object • Performance of Contract – Termination of Contract – Remedies for Breach of Contract Case Studies 1 The Indian Contract Act, 1872 The Indian Contract Act consists of the following two parts: General principals of the Law of Contracts – covered under section 1 to 75; the principles apply to all kinds of contracts irrespective of their nature Special kinds of contracts – covered under section 124 to 138 ; These special contracts are Indemnity & Guarantee (u/s124 to 147), Bailment & Pledge (u/s148 to 181) and Agency (u/s 182 to 238) in Chapter X – refer next Module 2) Section 76 to 123 – repealed by Sale of Goods Act, 1930 (refer Module 4) • • Section 239 to 266 – Chapter XI has been repealed by the Indian Partnership Act , 1932 ( not being covered separately; but major issues under different modules) The act does not affect any usage or custom of trade (u/s 1) – these prevail if reasonable & not illegal; an unique feature of this Act – most important branch of business law Some of the contracts not dealt with by the this Act are those related to Partnership, Sale of Goods (refer module 4), Negotiable...
Words: 15475 - Pages: 62
...Subject: Contract Law Section 1 (1) D (2) C (3) D (4) A (5) D (6) C (7) A (8) E (9) A (10) D (11) E (12) A (13) D (14) B (15) E Section 2 A | 5 | B | 8 | C | 7 | D | 9 | E | 2 | F | 10 | G | 6 | H | 1 | I | 3 | J | 4 | Section 3 Question 1 (1) Repudiation or anticipatory breach – An anticipatory breach of contract occurs when one of the parties unlawfully and unequivocally refuses to render performance of the contract. Basically repudiation is when either party owns performance of the contract and refuses to render it, not because he is entitled to do so. The repudiation can either be accepted or refused by the innocent party. Take note that if the innocent party does so ignore the repudiation, the legal position of both parties will remain unchanged. The innocent party must abide by his choice once it has been made. He will also lose the right to rescind if he refused to accept the repudiation or if the repudiation hasn’t been accepted within a reasonable time. To constitute an actual breach of contract the repudiation must be accepted and notice should be issued to the debtor, by the innocent party and will then amount to a rescission of the contract. The creditor may sue for the contracts rescission and damages if the contracts performance isn’t due yet. (2) Default of the debtor (mora debitoris) Mora debitoris – this is a form of breach of contract that takes...
Words: 5013 - Pages: 21
...Contents Question 1 | Pages | Contact Documents | 1 | Execution of the Contract | 1 | Requirement of Writing | 1 | Domestic Building Contracts | 2 | Variations | 2 | Question 2 | | How a Court Interprets Ambiguities and Inconsistencies | 2 & 3 | Definitions of Key Words | 3 | Order of Precedence | 3 | The Parol Evidence Rule | 3 | “Maxims” of Construction | 3 & 4 | Relevant Clauses | 4 | Rectification of Contracts | 4 | Criteria for Rectification | 4 | Question 3 | | Void for uncertainty | 5 | lump sum payment | 5 & 6 | Fixed date for completion | 6 | Stipulating a liquated damages amount | 6 | The prevention doctrine | 6 | Entitlements to an extension of time | 6 | | | References | 7 | Question 1 An abundance of documents may or may not form part of the building contract. How can a builder protect itself from any argument of what documents constitute the contract? If it’s not made clear during the contract formation stage which documents will form the building contract, disputes regarding what documents constitute the contract are likely to occur. To avoid this, the following precautions should be adopted by the builder. Before evaluating the documentation, the formation of the agreement must be assessed to ensure all essential elements are included, to make the contract legally binding. These elements consist of an intention to create a legal obligation, an offer and...
Words: 3657 - Pages: 15
...Elements of a Contract By Michael A. Petrat Business Law 206 Most people in our society are involved in contractual agreements of some kind. In most, if not all, aspects of law contracts can be found. Contracts are involved in family law, corporate law, employment law, litigation and real estate. Elements of a Contract: A contract is an agreement reached after sufficient consideration to do, or refrain from doing, some legal action. A contract is considered valid when two or more parties with capacity make an agreement involving valid consideration to do or to refrain from doing some lawful act. If these elements exist, the contract is valid. If one or more or these necessary elements is missing, the contract is void or voidable. In other words, it is not a true contract and therefore cannot be enforced. A void contract is no contract at all. It is not binding and no action can be maintained if it is breached. A disaffirmed is not necessary to avoid a void contract. If a contract can be rejected by one of the parties on legal grounds, it is called a voidable contract. A voidable contract is valid and binding unless the entitled party (the party who has legal grounds to reject the contract) voids it. A defect exists. The defect may be cured by ratification of the entitled party. The three basic components of a contract are the offer, the consideration and the acceptance. The following are six elements that are to help to determine whether or not the basic components...
Words: 3196 - Pages: 13
...existence of contract law is to prevent any sort of illegal behaviour, injustice and to clarify any confusion or misunderstanding amongst the offerror and the offeree. Everybody in this world is an offeree as we all purchase goods and services to meet our personal needs and if our expectations are not met, there is a problem which is why the contract is created for both parties to follow. However, if either of them fails to do so, then they are in breach of contract and the aggrieved party has legal rights that they can try and enforce. A contract is formed when there is an offer or acceptance. In this assignment I have been given a case to resolve and advise the parties whether they are in breach of contract or not. A contract is a promise or set of promises the law will enforce. The scenario I have been given states that Fred placed an advertisement providing his potential buyers with the information given below. ‘Garage sale of law books. Items include the entire set of Weekly Law Reports from 1970 – 1990 to be sold to the first person who is willing to pay £100 for the lot. Sale starts Saturday 11th December at 9am. Address 1, Fairfield Road, Hygate, Telephone Number, Hygate 12345.’ Hence, Peter sets out early on Saturday 11th December to be the first one in the queue and offers £100 to Fred. However, he discovers that Fred has sold the books to Sally who had phoned him to purchase the books as soon as she saw the advertisement. In order for a contract to arise, there...
Words: 1054 - Pages: 5
...Contract Law Shaconta Coy Rasmussen College Author Note This paper is being submitted on February 7, 2015, for Thomas Santangelo’s Section 03 Business Law course. Contract Law Case Study #1 After Gladys and Sam had got married, they bought a home. Sam’s father signed the mortgage note with the couple and also made monthly house payments. Shirley moved in with Sam a few later after Gladys moved out. Sam’s father stopped making monthly payments, and Shirley and Sam did not make any payments either. The mortgage company stated that Gladys needs to make the payments. Gladys remembers that third-party beneficiary and novation could help her in this situation. An individual who will gain from a contract drawn between the original parties is a third-party beneficiary. This third party beneficiary was not involved in the initial contract itself, but if the contract is completed, the third party stands to receive a benefit. Under certain conditions, the third party has legal rights to enforce the contract or share in its proceeds. Gladys would not be considered third-party beneficiary simply because she was a part of the original contract. Novation is an agreement of parties to a contract to substitute a new contract for the old one. A novation is usually used when the parties find that costs or act cannot be made under the terms of the original contract. While voluntary, a novation is often the only way any funds can be paid. If all parties can agree, a novation would solve...
Words: 449 - Pages: 2
...------------------------------------------------- CORPORATE LAW ASSIGNMENT NO. 1 March 24, 2015 Ujala Liaqat BBA-2K11 (SECTION A) March 24, 2015 Ujala Liaqat BBA-2K11 (SECTION A) WHAT IS THE DIFFERENCE BETWEEN OFFER AND INVITATION TO TREAT? An offer is a statement of the terms which the client (the offeror) is prepared to be contractually bound. The offer must be complete, specific and capable of being accepted. It must include the fundamental terms of the agreement with the intention that no further negotiations are to take place. Client offer contractor the work and therefore the contractor must carry out the work under the client’s terms and conditions. It is possible to make a conditional offer. The effect of this is that an offer cannot be accepted if the condition has not been satisfied. For example the client requires the contractor to have a specific tool or machine before an offer can be made. Termination of offer: * The offer is withdrawn or revoked at any time prior to acceptance provided there has been communication between the client and the contractor; * The client making the offer dies; * Failure of a condition. An invitation to treat is different to an offer as it only invites the party to make an offer and it is not intended to be binding. The contractors are invited to bid on the job, by calculating the total work cost and to have the tenders submitted in a specified time. The main difference between this situation and an auction...
Words: 447 - Pages: 2
...Contract Law (Mutuality of Consideration) November 7, 20013 SUMMARY OF FACTS Bernie is selling his 2006 Ford Fusion. Vivian makes an offer to buy Bernie’s car for $12,000. Bernie and Vivian meet and agree on the selling price of $12,500. Vivian needs more time to come up the money for the car. Bernie agrees to give Vivian time to come up with the money to purchase his car. Bernie requires Vivian to put down a $1,000 deposit and pay the full balance by March 31st. Bernie drafts up an agreement; and in the agreement and it is stated that if the buyer breaches the agreement, the seller may keep the buyer’s deposit, but the shall be limited to this remedy and only this remedy. Likewise, is the seller breaches the agreement, the seller must refund the purchaser’s deposit, but the parties shall be limited to this remedy and only this remedy. Vivian reads and signs the agreement. Later Vivian realizes that she is not going to be able to get the money together by the deadline. She call’s Bernie to tell him that she is pulling out the deal. Bernie says he is going to keep the deposit. Vivian sues for her deposit claiming there was no mutuality of consideration for the agreement and the contract was therefore void. ISSUE Under Virginia law is their mutuality of consideration when the seller could back out of the agreement by giving the purchaser her deposit back. Rule |Sayres v. Wheatland Group |L.L.C. | OVERVIEW: Defendants sought to apply...
Words: 2144 - Pages: 9
...Ball Co [1892] 2 QB 484 Prepared by Claire Macken Facts: • Carbolic Smoke Ball Co (def) promises in ad to pay 100 pounds to any person who contracts flu after using smoke ball. • Carlill (plaintiff) uses ball but contracts flu + relies on ad. Issue: Was there a binding contract between the parties? - A contract requires notification of acceptance – Did Mrs Carlill notify Carbolic of the acceptance of the offer? - Did Mrs Carlill provide consideration in exchange for the 100 pounds reward? Def argument is: There was no binding contract – the words of the ad did not amount to a promise b/c: • the ad was too vague to make a contract – there was no limit as to time & no means of checking use of the ball by consumers; • the terms are too vague to make a contract- no limit as to time – a person might claim they contracted flu 10 yrs after using the remedy • No contract b/c a contract requires communication of intention to accept the offer or performance of some overt act Plaintiff’s argument is: ad was an offer they were under an obligation to fulfill because it was published so it would be read and acted upon & it was not an empty boast. • The promise was not vague - & there was consideration. Held: (Application). There was a binding contract. Carlill successful. Lindley LJ – The ad was an express promise – to pay 100 pounds to anyone who contracts flu after using the ball three times daily x 2 weeks. • The ad was not a mere puff: b/c of this statement “1000 is deposited with the Alliance...
Words: 772 - Pages: 4
...DISCHARGEMENT OF CONTRACT The law of contracts forms a substantial part of our various relationships that can have some sort of influence over us on an almost daily basis – even when there is no physical contract in front of us we may still be privy to some sort of contractual obligation. Alternatively, if you’re a fan of social theorists such as Jean-Jacques Rousseau, you may argue that we’re also bound by ‘the social contract’, but we digress. Getting back to our original point, the law of contracts plays an enormous role in many of our interactions and for the most part, there may be no real concern in regards to the performance of a contract and an agreement will be completed accordingly. However, this does not mean that issues won’t arise within a contractual relationship, and there may be circumstances where you may need to discharge a contractwhich can be done by either one, or all of the parties to the agreement, and can be discharged by either: * BY PERFORMANCE * BY MUTUAL AGREEMENT * BY SUPERVENING IMPOSSIBILITY * BY OPERATION OF LAW * BY LAPSE OF TIME * BY LAPSE OF TIME BY PERFORMANCE Before exploring the general ways in which a contract can be discharged, the most obvious way in which acontract will come to an end, is when all parties fulfil their contractual obligations and the contract has been discharged via performance. Easy. Exceptions to performance Some people may be of the belief...
Words: 2112 - Pages: 9
...Contract Law Employment Contracts Entry Level vs. Executive Entry Level Contracts The contract that is being introduced is for an entry-level position at Taboo Resort Golf and Spa. The contract itself is very generic and can apply to any entry-level position at the resort. Although the contract does not speak to specific position, it was presented to a future front desk agent. The contract is not lengthy and is divided into sections. This method assures that the future employee is reading the full contract and is not missing any important or valuable information. The following will deconstruct the contract in order to show how the resort showcases risk management. Hours, Wages &Gratuities The contract first outlines the duration of your work period. In this case a six-month period was discussed and agreed to. The front desk agent was considered as a full time position therefore it was expected to have forty hours of work a week. However, the contract notes in bold, “Please note that hours are based on business, we cannot always guarantee 40 hours per week.” This is a great example of how Taboo Resort saves them from explaining to employees why they may not be getting many hours. Though they are considered full time, it states in the contract that they are not promised these hours due to the nature of the industry. However is you are keen on working forty or more hours there is always a way to negotiate. At a resort there are many departments that need help...
Words: 2682 - Pages: 11
...A) Law of contract An agreement enforceable in law, a contract, needs to fulfill 4 elements: offer, acceptance, consideration and intention to be valid. It legally binds parties to act in accordance to the verbal or written terms stated in the contract. If there is a breach of contract, the innocent party can sue for damages or demand for specific performance to be done. a) Applicable law There are three categories of terms of contract: conditions, warranties and innominate terms. Classifications of these terms are imperative as consequence faced will vary from termination of contract and/or paying for damages. Condition terms are the fundamental terms of a contract, going to the very root of the contract (Poussard v Spiers (1876)). A breach of condition allows the company to terminate the contract and collect reparation from the contract breaker. Applying fact to law In this case, Ravi and MicroHard signed a contract where one of the terms- (3) stated in the contract was that MicroHard will provide resources and utilize employees to perform the necessary services. People engage MicroHard solely for its software support services. Therefore, it is a condition that MicroHard will provide services to resolve software problems. However, MicroHard did not fulfill those conditions. The sent employee was incompetent and failed to perform the service of repairing Ravi’s software. Therefore there was a breach of condition by MicroHard. Conclusion Both parties had the intention...
Words: 853 - Pages: 4
...Contract [Name of the Writer] [Name of the Institution] Contracts Introduction A contract is a legal agreement between two parties. For a contract to be valid, it must meet all prerequisites of the law, should bind the involved parties, and should be implementable in a legal court. Legal Competency: This means that the contract must be legally recognizable, i.e. both the parties entering into the agreement must have reached legal age (Miller, 2010). 1. Mutual Agreement: Also known as mutual consent, this means that both the parties entering the contract must be willing (and able). 2. Consideration: This refers to the payoff of the contract for both the parties involved. It can be monetary (valuable consideration) or in the form of physical items (goods consideration). 3. Stated Contract: The contract should be written in clear terms, in order to be clearly understood by both the parties (Beale et al 2010). Therefore, in light of the above framed notions, the case of Don Willetts will be deciphered. Moreover, this paper will address 2 questions in order to meet the pretext of the paper. Q1: What should you do about continuing to do business with Don? Answer: In the context of this case, the business with the Don should be stopped right away. As he took advantage of the 17 year old boy and made him sign the contract. Although the 17 year old should have told about the contract. The business with the Don should be stopped on the basis of ill intention...
Words: 1312 - Pages: 6
...|Coursework Header Sheet |[pic] | |186606-24 | | |[pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] | | |Course |LAW1091: Business & Co Law |Course School/Level |BU/UG | |Coursework |Business and company Law |Assessment Weight |100.00% | |Tutor |MF Ottley |Submission Deadline |01/12/2011 | [pic] |Coursework is receipted on the understanding that it is the student's own work and that it has not, in whole or part, been presented | |elsewhere for assessment. Where material has been used from other sources it has been properly acknowledged in accordance with the | |University's Regulations regarding Cheating and Plagiarism. | [pic] 000613042 [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] [pic] Han Tun |Tutor's comments ...
Words: 2059 - Pages: 9
