Contract Law Flashcards
What is a contract
A legally binding agreement between two or more parties who promise to do something for each other. Enforceable by law.
8 elements of a contract
Offer Acceptance Consideration Intention to contract Capacity to contract Consent to contract Legality of form Legality of purpose
Offer
One parry asks another to enter into a deal with them.
Terms must be clearly communicated (writing or speaking)
No conditions attached
Acceptance
Person agrees to all terms without any conditions
By writing, speaking, conduct
Consideration
Money given from one party to the other for a contract to be valid.
Intention to contract
Both parties must know and mean it to be legally binding
Know they can go to court if they break it
Capacity to contract
A person has the legal right to make a legally binding contract
Everyone bar minors, incapacitated people, diplomats w/ immunity.
Consent to contract
Both parties must give real genuine, voluntary permission to enter, can’t be forced.
Legality of form
Some contracts must be drawn up in a certain way to be legally binding.
Eg for a house it has to be in writing.
Legality of purpose
Means that legally binding contracts can only be used for legal transactions. No agreement involving crime or breaking the law is a contract.
4 reasons for termination of contracts
Performance
Agreement
Breach of contract
Frustration
Performance
Once the contract is complete, it ends
Agreement
Both parties voluntarily agree to end it.
Employee finishes six month project in three.
Frustration
An event that was not predictable when contract was drawn up, that neither party can control, ends the contract. A death or bankruptcy.
Breach of contract
Once a party breaks the contract it’s terminated as they failed to carry their side out.
