Explains the aspects of formation of a contract. These notes mention the process of offer (including invitations to treat), acceptance and consideration. Each important aspects are related to famous UK court cases.
Week 2: The contract
Contract: Legally binding agreement between two or more parties that is enforceable by law
(governs commercial/employment relationships)
Simple contract: Contract that does not need to be in the form of a deed to be valid
Parol contract: Another name for a simple contract
o E.g. sale of hire of goods, services or land
Standard form contract (contract of adhesion): Stipulates terms and conditions with no
room for negotiation
o Minority
Deeds: Legal document that is signed and delivered, especially one regarding the ownership
of property or legal rights
o Land transfers
o Leases
o Appointments of trustees
o Power of attorney
Business transaction
Generally, no requirement for writing
o BUT, some contracts do need to be in writing
The assignment of the benefit of contractual rights (section 136, Law of
Property Act 1925)
A contract for the sale of a land, an equitable charge or a mortgage of a legal
estate in land (section 2, law of property (Miscellaneous provisions) Act
1989)
A transfer of shares (section 770, Companies Act 2006)
Assignment of a number of intellectual property rights (section 90(3) and
222(3), Copyright Designs and patents Act 1988)
Guarantees (section 4, Statute of Frauds, 1677)
o Determine from the actions of parties whether or not a contract is coming to
existence and on what terms the conditions that contract should be performed
o Reading the intentions of parties
A minor breach in contract: The contract cannot be terminated BUT, there will be financial
compensation
Freedom of contract: Self-imposed obligations
Laissez-faire system
Government interference
Consumer protection/employee protection
Parties are free to determine terms that suits them best
All contracts require
An offer: Full clear statement of terms on which the maker (offeror) is prepared to do
business with the person to whom the offer (offeree) is communicates
o Offeror: Person who makes the offer
o Offeree: Person who receives the offer
o Bilateral: Contractual promise of performance of an act in return for the other
party’s promise of performance
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