Contract 1

Question 1

What are contracts? And what are the three needed requirements to be successful?

Answer 1

Contracts are legal agreements that can be enforced by law.
intention to create a legal; 
i) contractual intention; 
ii) agreement and 
(iii) consideration

Question 2

What is the first element of a contract?

Answer 2

The first element of a valid contract requires the parties to intend to create a legal relationship

Question 3

What is the second element of a contract?

Answer 3

The second element of a valid contract is agreement. Both parties must agree on the subject matter of the contract

Question 4

When does the first stage of an agreement occur?

Answer 4

The first stage in reaching agreement occurs when an offer is made by the offeror to the offeree.

Question 5

What is not an offer in contract law?

Answer 5

An invitation to treat is not an offer in contract law.

Question 6

What does a counter offer do to an original offer?

Answer 6

A counter offer cancels out the original offer.

Question 7

Acceptance of an offer is the…

Answer 7

Acceptance of an offer is the second stage of an agreement and to be effective it must be clearly communicated to the offeror.

Question 8

When does special rules apply to acceptance?

Answer 8

Special rules apply when an offer and an acceptance are made through the post.

Question 9

What is the third requirement of a valid contract?

Answer 9

The third requirement of a valid contract is consideration. This refers to the price paid in exchange for the promises both parties make.

Question 10

When are contracts invalid?

Answer 10

The parties to a contract must have legal capacity or the contract will not be binding.

• Must not be underage
• Have the mental capacity
• They did not freely give their consent
• A contract of illegal matter
• If they are under duress or undue influence.