P1 and P2 require learners to identify and explain when (and therefore how) the contract chosen would come into existence. This will require an analysis of the law relating to invitations to treat, which party makes the offer, any counter-offers, acceptance and consideration and the application of ...
Introduction
In this task I am required to prepare a report that will describe the
compulsory elements of a contract in a pay monthly mobile phone
contract of my choice. I will also explain the law in relation to the
formation of this contract.
Contracts
A contract is an agreement between two or more parties. It is a proposal
made by the parties to do something for one and other and is intended to
be legally binding. In business terms, a contract is more than just a
promise, there must be an intention to create the legally binding
agreement.
This is an example of an iPhone 6 mobile phone contract on the Carphone
Warehouse website. It is on the Vodafone 4G network and the person
taking out the contract would have to keep it for 24 months. The
individual would also be entitled to 1000 minutes, unlimited texts and 1GB
data.
Written contract
A written contract is an agreement between two parties that is stated on a
written document. These parties can be organisation, individuals or
businesses. All of the features of the agreement must be stated within the
contract. In order for the contract to be considered valid, all parties
involved must sign the contract. The main reason for having a written
contract is so that all parties are able to see what they are agreeing to
and they can have a record of it.
An example of a written contract would be an employment contract. An
employment contract is created and typed up by an employer. The
contract is then given to the employee, usually sent in the post and it is
then signed by the employee and returned to the employer via post.
1
, Verbal contract
A verbal contract has the same principles as a written contract in the
sense that it is legally binding. Although, it usually better to enter into a
written contract due to the fact that all of the terms of the contract are
outlined in the document. Verbal contracts are just as valid as written
contracts, the main difference is that verbal contracts are expressed using
words and expressions.
An example of a verbal contract is the purchasing of a product in a store.
The customer would be entering an agreement to pay for the products
that would be purchasing.
Standard form contract
A standard form contract is a contract between two parties. In this
contract the terms and conditions of the contract are set out by only one
of the parties. Therefore, the other party does not have the ability to
negotiate terms that would be more favourable for them. These contracts
are also known as adhesion or boilerplate contracts.
An example of a standard form contract would be an insurance policy. This
is due to the fact that an insurer what it will and will not insure.
Offer
An offer is an explicit proposal to a contract. If accepted, the contract is
completed and binds the party that made the offer and the other party
that is accepting the terms of the offer. An offer can be accepted or
rejected as desired by any of the parties participating in the contract. In
relation to contract law, an offer is a promise made by one party in
exchange for an act carried out by another party.
An example of an offer would be someone selling something to someone
else at a discounted price. An iPhone 6 sold by an individual for £300.
Invitation to treat
An invitation to treat is an invitation to customers to surrender and agree
to an offer made to them. It is an indication that an individual is prepared
to receive offers from others. An invitation to treat does not have the
intention to be binding. The person that’s available to receive an invitation
to treat is able to accept or reject until the final moment of acceptance.
For example, an auction can be seen be an invitation to treat, with the
property owner asking for offers of a certain amount and then selecting
which to accept.
Counter offer
A counter offer is an offer made by one party in response to a previous
offer made by the other party involved in the negotiation process of a final
2
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