Contracts (Elements and Termination) Flashcards
Agreement
Consists of Offer and Acceptance.
There must be a clear offer made by one party, and accepted by the other.
Offer (Sub heading of Agreement)
Made when one party asks another to enter a contract.
Can be made
-Orally
-In writing
-By conduct
Can be terminated by
-Revoking (contract is withdrawn)
-Rejection
-Lapse of time
-Death
(Sub heading of Agreement) Acceptance
The party recieving the offer accepts all terms of it
-Orally
-In writing
-By conduct
Intention to Contract
Both parties intend to create a legally binding contract.
Business agreement = ✓
Social and Private = X
Capacity to Contract
All parties have the legal ability to enter the contract, so they cannot if their under 18 (except for necessities), or if their mentally incapacitated
Consent to Contract
Both parties must enter voluntarily.
Invalid if
-They are bullied into it
-A genuine mistake is made
-A party is dishonest and gives false information
Consideration
Each party must give something of value to the other party
Legality of Purpose
It must be created for a legal purpose
Legality of Form
Must be in correct legal format. Some contracts must be written e.g buying a house
Termination of a Contract
Performance
Agreement
Frustration
Breach of Contract
Performance (Termination)
Both parties fulfill their side of the contract
Agreement (Termination)
Both parties mutually agree to end the contract, even if it has not been completed
Frustration (Termination)
An unforseen event, which completes the contract from being fulfilled, occurs. This could be weather related, or a robbery
Breach of Contract (Termination)
Ends when a party breaks their side of the contract.
A condition is an essential element.
A warranty is a non essential element, and can be resolved with compensation
Remedies for a Breach of Contract
Compensation
Rescind the Contract
Specific Performance
