WHAT IS A CONTRACT?
A contract is a legally enforceable agreement between parties having the
capacity to make it.
DIFFERENCES BETWEEN CONTRACT AND PROMISE
1) A contract requires two parties coming together to an agreement
(bilateral agreement) while a promise is the product of one person’s
intention alone to do something for another (unilateral agreement).
2) Offers must be accepted in a contract, but promises do not require an
acceptance.
3) With a contract an offer is irrevocable until is accepted. Because a
promise does not require an acceptance, it is binding and is not
irrevocable from the moment it is made,
4) A promise places obligation on one person’s alone. By contrast, a
contract places obligation on both parties of the contract.
In the case of “Morton’s Trustees v the Aged Christian Friend Society of
Scotland” it was held that a contract was made between Morton to make 10
annual payments of 100 pounds to the committee. Since a contract was made
when he died before the last 2 payments the court held that the committee
was entitled to recover the remaining sum of money.
By contrast, in “Smith v Oliver”: Mrs Oliver had given money frequently to a
church. After her death the church raised a court action that she had promised
to provide 7,000 pounds, but no provision has been made in the will. It was
held no contract existed only a promise and had nothing signed stating that to
prove it, therefore, the action failed.
The difference between the cases lies in the fact that Mr Morton made an offer
to the committee and it was accepted. On the other hand, Mr Oliver never
made an offer nor had there be any acceptance.
-The requirements of Writing Scotland Act 1995 require that all unilateral
gratuitous obligations must be made in writing unless a promise made during a
business.
, AGREEMENT
The basic element of a contract is an agreement and in order to determine
whether there is an agreement we analyse it in terms of an offer and
acceptance. Therefore, this means that for an agreement to be constituted the
parties must agree on the essential features of the contract. In legal terms, this
is translated as “consensus in idem” (meeting of the minds).
In the case of Muirhead and Turnbull v Dickson: it was held that commercial
contracts cannot be arranged by what people think in their inmost minds.
Commercial contracts are made according to what people do.
In the case of Mathieson Gee Ltd v Quigley: it was held that no contract
existed between the parties because the respondent offered one sort of
contract and the appellant accepted another form of contract.
OFFER
1)A communication of offer must be addressed to the offeree.
2)Generally you can withdraw your offer at any time before it is accepted.
3)If there is no end on it will lapse after reasonable time.
HOW DO WE DISTINGUISH AN OFFER FROM AN INVITATION TO
TREAT?
An invitation to treat is an invitation to others to make offers as part of the
negotiating process. It includes items displayed in the shop, advertisement etc.
In the case of “Pharmaceutical Society of GB v Boots Cash Chemists”: it was
held that goods on the shelf constituted and invitation to treat not an offer.
However, in the case of Carlil v Carbolic Smoke Ball Co: it was held that there
was a contract because the statement in the advertisement was an offer and
by buying the smoke balls the pursuer accepted the offer.
A contract is a legally enforceable agreement between parties having the
capacity to make it.
DIFFERENCES BETWEEN CONTRACT AND PROMISE
1) A contract requires two parties coming together to an agreement
(bilateral agreement) while a promise is the product of one person’s
intention alone to do something for another (unilateral agreement).
2) Offers must be accepted in a contract, but promises do not require an
acceptance.
3) With a contract an offer is irrevocable until is accepted. Because a
promise does not require an acceptance, it is binding and is not
irrevocable from the moment it is made,
4) A promise places obligation on one person’s alone. By contrast, a
contract places obligation on both parties of the contract.
In the case of “Morton’s Trustees v the Aged Christian Friend Society of
Scotland” it was held that a contract was made between Morton to make 10
annual payments of 100 pounds to the committee. Since a contract was made
when he died before the last 2 payments the court held that the committee
was entitled to recover the remaining sum of money.
By contrast, in “Smith v Oliver”: Mrs Oliver had given money frequently to a
church. After her death the church raised a court action that she had promised
to provide 7,000 pounds, but no provision has been made in the will. It was
held no contract existed only a promise and had nothing signed stating that to
prove it, therefore, the action failed.
The difference between the cases lies in the fact that Mr Morton made an offer
to the committee and it was accepted. On the other hand, Mr Oliver never
made an offer nor had there be any acceptance.
-The requirements of Writing Scotland Act 1995 require that all unilateral
gratuitous obligations must be made in writing unless a promise made during a
business.
, AGREEMENT
The basic element of a contract is an agreement and in order to determine
whether there is an agreement we analyse it in terms of an offer and
acceptance. Therefore, this means that for an agreement to be constituted the
parties must agree on the essential features of the contract. In legal terms, this
is translated as “consensus in idem” (meeting of the minds).
In the case of Muirhead and Turnbull v Dickson: it was held that commercial
contracts cannot be arranged by what people think in their inmost minds.
Commercial contracts are made according to what people do.
In the case of Mathieson Gee Ltd v Quigley: it was held that no contract
existed between the parties because the respondent offered one sort of
contract and the appellant accepted another form of contract.
OFFER
1)A communication of offer must be addressed to the offeree.
2)Generally you can withdraw your offer at any time before it is accepted.
3)If there is no end on it will lapse after reasonable time.
HOW DO WE DISTINGUISH AN OFFER FROM AN INVITATION TO
TREAT?
An invitation to treat is an invitation to others to make offers as part of the
negotiating process. It includes items displayed in the shop, advertisement etc.
In the case of “Pharmaceutical Society of GB v Boots Cash Chemists”: it was
held that goods on the shelf constituted and invitation to treat not an offer.
However, in the case of Carlil v Carbolic Smoke Ball Co: it was held that there
was a contract because the statement in the advertisement was an offer and
by buying the smoke balls the pursuer accepted the offer.
