CONTRACT LAW

Contract Law

Contract Law

A contract is an agreement between two or more persons (individuals, businesses, organizations or government agencies) to do, or to refrain from doing, a particular thing in exchange for something in value. Contracts generally can be written, using formal or informal terms, or entirely verbal. Contracts are governed by general principals and are usually derived from the common law (or judge-made law). However on the other hand, Professor Atiyah (1968b) argues that, there are no such things as a typical contract at all. It was argues that contracts are a discrete, two-party, commercial, executory exchange, but notes that contracts can be found which depart from each feature of this classic model. Furthermore, Atiyah perceived the law of contract as a set of power-conferring rules that enable parties to enter into agreements of their own choise on their own agreed terms.

Agreeing to perform an illegal or illicit act is not consideration and the contract is void. The entirety of the scope of consideration can be seen in the case of Thomas V. Thomas [1842] 2QB851, where it was distinguished that the $1 paid by the widow and promise to keep the house in good repair, to the testator was good consideration as it was of value in the eyes of the law. Furthermore, a mutual assent or a meeting of minds, is a vital element of a binding contract. Putting the deal down on paper prior to singing it goes a long way to avoid future misunderstandings and disputes. Meeting of the minds sometimes can be expressed through words spoken or gestures made or can be inferred from the surrounding circumstances. There is no meeting of the minds if : (1) one side is obviously joking or bragging,(2) there is no actual agreement or (3) both sides have made a material mistake as to the terms or details of the contract. A clearer picture can be seen through, Belfour v. Belfour [1919] 2KB571, where a wife sought to enforce a promise by her husband to pay her $30 per month. It was held by Atkin LJ that the parties did not intend their agreement to be attended by legal consequences.

Terms are the contents of the contract, determining the rights and obligations of the contracting parties to each other. They may be looked upon as the source of the parties contractual rights and obligations. These are divided into express terms, what the parties agree expressly, whether orally or in writing ; and implied terms, which are terms (rights and obligations) that are found within the express agreement of but nevertheless form part of the contract, their source being external to the contract. A statement is most likely incorporated into a contract as a term if it is of such relevance to the person to whom it is made that, the non-existance of that particular term would deter him from entering the contract in the first place. This can be seen clearer in the case of Couchman ...