Law and Contract - (Part 1: Contract Law & Part 2: Tort Law)

Law and Contract

Part 1 Contract Law

Q1- Describe the five key components of contract formation and outline how these legal concepts work in practice

Ans. One might have thought that contract law would have become fixed and certain after such a long time of human bargaining. In fact, most principles of contract date from as late as the eighteenth and nineteenth centuries and they are, of course, being re-examined today. Contract law is generally at home in business houses for, although contract is also based upon the moral importance of keeping one's promises, it will rarely be the subject of legal dispute between friends and family. (Bradley, 2003)

Like all areas of law, an element of 'public policy' enters the decisions of the courts and it is not surprising that the changes and developments facing the business community will tend to drive the law of contract. It may be that students will find cases on horse-dealing being applied to wider issues about the ingredients necessary for agreement. Later, those deals concern motor cars.

In fact, however, the law of contract is not just about high finance and sophisticated negotiations involving cutting edge economic philosophy and the cleverest minds trying to catch each other out by slippery language and sophisticated interpretations. Contract problems are more often about very ordinary people going to the district judge in the county court to decide some dispute which others might think of as trivial, but which has ignited one or both of the parties into an argument about fairness and what was done as well as what was agreed. (Koffman, 2004)

A contract is a legally enforceable agreement. A simple contract is one which does not require the agreement to be in any particular form. It follows that the contract may be entirely oral, it may be in writing or it may even be implied from the conduct of the parties. In fact the vast majority of simple contracts are entirely oral. For example, all of the following everyday transactions are simple contracts: purchasing a newspaper, buying a bus or rail ticket, purchasing a sandwich and a drink at lunchtime, buying a book or a CD, going to the cinema, the theatre or a football game. To amount to a valid simple contract, the following essential elements must be present: (i) Agreement. The parties must be in agreement. Whether they are in agreement is usually determined by the presence of an offer by one party which has been accepted by the other. (ii) Consideration. A contract in English law must be a two-sided bargain, each side providing or promising to provide some consideration in return for what the other is to provide. (Only a promise made by deed can be binding if there is no consideration;) (iii) Intention to create legal relations. The parties must clearly have intended their agreement to be legally binding. For example, a mere social arrangement - such as an agreement with a friend ...