Module 3 - Contract Law
- SOGA (Sale of Goods Act 1979)
- UCTA (Unfair Contract Terms Act 1977)
Chapter 1 – Introduction to the Law of Contract
A contract may be defined as ‘an agreement giving rise to obligations which are enforced or
recognised by law’
The core elements that form a valid and enforceable contract are:
Agreement – involves the court establishing an agreement through the process of
offer and acceptance. ‘The offeror and offeree’.
Intention – the parties must have intended their agreement to have legal
consequences.
Consideration – each side must promise to give or do something for the other.
Other essential elements of a Contract include:
Capacity to contract – the parties must be capable of entering into a legally
enforceable contract.
Consent - The agreement must have been freely entered into by the parties. Consent
may be vitiated by duress, or by undue influence
Legality - The purpose of the agreement must not be illegal, or contrary to public
policy
Certainty of terms - To create a binding contract the terms of the agreement must be
certain, if not there will be no contract (Scammell v Ouston [1941])
Form - A contract does not have to be in writing unless it is a: contract by deed,
contract in writing or contract evidenced in writing.
Classification of Contracts:
Bilateral Contracts exists when A promise by one party is exchanged for a promise by the
other. It is enforceable on the basis of the exchanged promises. In a contract for the sale of
goods, for example, the buyer promises to pay the price and the seller promises to deliver
the goods.
Unilateral Contracts are those where only one party makes a promise to do something in
return for an act by the other party. Acceptance of an offer by an offeree need not be
communicated to the offeror in a unilateral contract; performance of the condition to fulfil the
promise is taken as acceptance, e.g., offer of a reward
Void contracts are where the whole transaction is regarded as a nullity. It means that at no
time has there been a contract between the parties
,Voidable contract is a contract which is voidable operates in every respect as a valid
contract unless and until one of the parties takes steps to avoid it
Enforceable contracts are unenforceable contract is a valid contract, but it cannot be
enforced in the courts if one of the parties refuses to carry out its terms.
, Chapter 2: Offer and Acceptance (Agreement)
The question is asked is whether there has been a definite offer by one party (the offeror)
and an acceptance by the other (the offeree).
Offer
An offer is an expression of willingness to contract, made within the intention that it shall
become binding on the offeror, as soon as it is accepted by the offeree.
To constitute a valid offer, the terms, which may be in writing, by words or by conduct, must
be complete and made with the intention that it will be binding.
An invitation to treat (ITT) is not an offer – merely an invitation to negotiate and receive offer
Invitation to Treat
An invitation to treat is where one party, demonstrating a willingness to negotiate, merely
invites offers, which the other party is then free to accept or reject. It is simply an invitation to
enter negotiations.
Requests and replies to requests for information will often be interpreted as invitations to
treat as per Harvey v Facey [1893].
The distinction between offers and invitations to treat is often difficult as it depends upon the
intention of the person making the statement.
A contract having all the essential elements is valid:
A letter to tenant inviting him to purchase his house considered invitation to treat
(Gibson v Manchester City Council [1979])
An application form sent to tenant to purchase his house considered offer (Storer v
Manchester City Council [1974])
Termination of offer
An offer is capable of acceptance until it is brought to an end in one of the following ways:
1. Revocation by Offeror – the offer may be revoked by the offeror at any time until it is
accepted as per Payne v Cave [1789]. This applies when the offeror has stated that
the offer will remain open for a certain period. An offer to settle under P 36 CPR is an
offer to enter into a contract;
2. Communication of revocation – the revocation must be communicated to the offeree.
However, this does not need to be direct if it can be shown that they were aware of
the revocation prior to their acceptance;
- SOGA (Sale of Goods Act 1979)
- UCTA (Unfair Contract Terms Act 1977)
Chapter 1 – Introduction to the Law of Contract
A contract may be defined as ‘an agreement giving rise to obligations which are enforced or
recognised by law’
The core elements that form a valid and enforceable contract are:
Agreement – involves the court establishing an agreement through the process of
offer and acceptance. ‘The offeror and offeree’.
Intention – the parties must have intended their agreement to have legal
consequences.
Consideration – each side must promise to give or do something for the other.
Other essential elements of a Contract include:
Capacity to contract – the parties must be capable of entering into a legally
enforceable contract.
Consent - The agreement must have been freely entered into by the parties. Consent
may be vitiated by duress, or by undue influence
Legality - The purpose of the agreement must not be illegal, or contrary to public
policy
Certainty of terms - To create a binding contract the terms of the agreement must be
certain, if not there will be no contract (Scammell v Ouston [1941])
Form - A contract does not have to be in writing unless it is a: contract by deed,
contract in writing or contract evidenced in writing.
Classification of Contracts:
Bilateral Contracts exists when A promise by one party is exchanged for a promise by the
other. It is enforceable on the basis of the exchanged promises. In a contract for the sale of
goods, for example, the buyer promises to pay the price and the seller promises to deliver
the goods.
Unilateral Contracts are those where only one party makes a promise to do something in
return for an act by the other party. Acceptance of an offer by an offeree need not be
communicated to the offeror in a unilateral contract; performance of the condition to fulfil the
promise is taken as acceptance, e.g., offer of a reward
Void contracts are where the whole transaction is regarded as a nullity. It means that at no
time has there been a contract between the parties
,Voidable contract is a contract which is voidable operates in every respect as a valid
contract unless and until one of the parties takes steps to avoid it
Enforceable contracts are unenforceable contract is a valid contract, but it cannot be
enforced in the courts if one of the parties refuses to carry out its terms.
, Chapter 2: Offer and Acceptance (Agreement)
The question is asked is whether there has been a definite offer by one party (the offeror)
and an acceptance by the other (the offeree).
Offer
An offer is an expression of willingness to contract, made within the intention that it shall
become binding on the offeror, as soon as it is accepted by the offeree.
To constitute a valid offer, the terms, which may be in writing, by words or by conduct, must
be complete and made with the intention that it will be binding.
An invitation to treat (ITT) is not an offer – merely an invitation to negotiate and receive offer
Invitation to Treat
An invitation to treat is where one party, demonstrating a willingness to negotiate, merely
invites offers, which the other party is then free to accept or reject. It is simply an invitation to
enter negotiations.
Requests and replies to requests for information will often be interpreted as invitations to
treat as per Harvey v Facey [1893].
The distinction between offers and invitations to treat is often difficult as it depends upon the
intention of the person making the statement.
A contract having all the essential elements is valid:
A letter to tenant inviting him to purchase his house considered invitation to treat
(Gibson v Manchester City Council [1979])
An application form sent to tenant to purchase his house considered offer (Storer v
Manchester City Council [1974])
Termination of offer
An offer is capable of acceptance until it is brought to an end in one of the following ways:
1. Revocation by Offeror – the offer may be revoked by the offeror at any time until it is
accepted as per Payne v Cave [1789]. This applies when the offeror has stated that
the offer will remain open for a certain period. An offer to settle under P 36 CPR is an
offer to enter into a contract;
2. Communication of revocation – the revocation must be communicated to the offeree.
However, this does not need to be direct if it can be shown that they were aware of
the revocation prior to their acceptance;
