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Law relating to contract
Laws understanding contracts
Law relating to contract
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1.0 Introduction A contract is defined as ‘an agreement enforceable by law’, which means an agreement that is legally binding between two or more parties. The Contract Act 1950 governs legislation in Malaysia and differs from English Law in terms of provisions (Lee & Detta, 2009). The Law of Contract consists of five elements: offer and acceptance, intention to create legal relations (ITCLR), consideration, capacity, and free consent. The elements that apply in the case of Gabby and Lorna are offer and acceptance. An offer is divided into bilateral and unilateral offers. A bilateral offer is an agreement between two or more parties in a proposal. In contrast, a unilateral offer is between one individual and the whole world. Section 2(c) states that the first party who makes the proposal invites the other party is called the offeror, while the person who accepts the proposal from the offeror is called the offeree. For a proposal to be converted into a promise, the acceptance of the proposal must be absolute and unqualified, as stated in Section 7 of the Contracts Act. Section 4(1) says that an offer is effective once it is communicated by the offeror to the offeree, whether it is through oral or written means. In acceptance, Section 7(b) states that silence could amount to acceptance if both parties have precise and corresponding ways of communication, such as the postal rule. The postal rule is an exception to the communication rule. To apply the postal rule, both parties must have mutual correspondence and apply the general rule of acceptance that takes effect when it is posted. Hence, the offeror should mention to the offeree whether to reply or not reply to the offer given. The exception to the communication rule... 3.0 Conclusion In conclusion, there is no valid contract between Lorna and Gabby. Although Lorna wrote a letter to Gabby offering the sale of her antique vase, acceptance did not occur, even though Gabby had emailed and posted the letter of acceptance to Lorna. This is because Gabby does not fulfill Lorna’s condition of ‘notice by writing,’ and communication did not occur between them, which leads to an exception to the postal rule. Due to these problems, Lorna had revoked her offer by writing a revocation letter to Gabby because she had sold the vase to Joshua. Gabby was informed about the revocation letter by her husband, Frank, and therefore the offer is terminated, and there is no agreement or valid contract between them. Hence, Lorna has not breached the contract, and Gabby cannot take any legal actions towards Lorna.
Maria had spoken with Eva over the phone concerning the correct total amount of $60,000 for rendering decorating services provided by Eva. Maria had sent a letter of the telephone conversation stating that Eva agreed to take $60,000 in full satisfaction obligation under the contract. Although Eva, changed her mind when depositing the check in the bank, she legally entered a mutual agreement over the telephone where it resulted in a unliquidated debt, payment is lower than actual.
Whether oral or written, the contract must manifest a mutual intent to be bound expressed in a manner capable of being understood, and include a definite offer, unconditional acceptance and consideration.” (Express Contract 2016) The above definition is a much clearer explanation with key elements outlined; 1. mutual intent, 2, expressed in a manner capable of being understood, 3. definite offer, 4. unconditional acceptance and 5. Consideration.
HILLIARD, J. And O’SULLIVAN, J. (2012) The Law of Contract [Online] 5th Ed. Oxford: Oxford University Press. Available from - http://books.google.co.uk/ [Accessed: 2nd January 2014]
The offeror is bound to fulfil the terms of his offer once it is accepted. The offer may be made in writing, by words or by conduct. Unilateral – some offers are purely one sided, made without the offeror’s having any idea whether they will ever be taken up and accepted, and thereby transformed into a contract. For example, when an advertisement where a person is rewarding another one if he finds his pet (which was lost). In this case, the person who is making such an offer is not sure whether this offer will ever be accepted.
“An offer is capable of being converted into an agreement by acceptance. It must consist of a definite promise to be bound, provided that certain specified terms are accepted”
The basic law of a contract is an agreement between two parties or more, to deliver a service or a product. And reach a consensus about the terms and conditions that is enforced by law and a contract can be only valid if it is lawful other than that there can’t be a contract. For a contract to exist the parties must have serious intentions, agreement, contractual capacity meaning a party must be able to carry a responsibility, lawful, possibility of performance and formalities. Any duress, false statements, undue influence or unconscionable dealings could make a contract unlawful and voidable.
The person who makes the offer is known as ‘offeror’ or ‘promisor’. (Lee and Detta, 2009) An offer can be made in the method of orally, by conduct, writing or by the mixture of these forms. An offer must require effective communication with the offeree. The formation of a contract when the offeree accepts the proposal.
Defendant sent plaintiff a document titled ‘Agreement for Sale’ and the letter indicates that if Mr. Storer sign the Agreement and return it, the defendant will send Mr. Storer the Agreement signed on behalf of the council in exchange. Therefore, Mr. Storer signed and returned the ‘Agreement for Sale’, however, the defendant refused to sell the property to Mr. Storer. The court held that to a reasonable man, the defendant letter appeared to commit to sell
A contract is an agreement between two parties in which one party agrees to perform some actions in return of some consideration. These promises are legally binding. The contract can be for exchange of goods, services, property and so on. A contract can be oral as well as written and also it can be part oral and part written but it is useful to have written contract otherwise issues can be created in future. But both the written as well as oral contract is legally enforceable. Also if there is a breach of contract, there are certain remedies for that which are discussed later in the assignment. There are certain elements which need to be present in a contract. These elements are discussed in the detail in the assignment. (Clarke,
A valid contract is an agreement including promises made between two or more parties with an intention of certain legal rights and legal responsibility that are enforceable. For there to be a contract – that must contain four essential elements- offer, acceptance, intention to create legal relations and consideration.
A contract is a written or expressed agreement between two parties to provide a product or service. There are various types of contracts relating to business field. Three types of contracts which can seen in the mentioned case are,
A contract is generally considered to be an exchange of promises or an agreement between parties which in due course legally binds the parties; this can be enforced by the English Law. A contract is always, referred to the basic foundations of Contract Law, which refers to promises being kept amongst two parties. It is clear that all people make contracts nowadays and do not even consider for a moment that they are forming contracts; these can be formal or informal, oral or written.
Basically, a contract is an agreement between parties having a capacity to make it, in the form demanded by the law, to perform, on one side or both, acts which are not trifling, indeterminate, or illegal, creating an obligation in a court of law. As stated in the Contract Act 1950 section 2(h), “an agreement enforceable by law is a contract”. There are four elements of contract which are proposal (offer), acceptance, consideration and intention to create a legal relation and consideration. All the matters on a contract in Malaysia are stated in the Contract Act 1950. The Contracts Act of 1950 is an act that involves contracts made between individuals and also the basic fundamentals of how a contract works or functions, and what actions can be taken if someone against the act and how the other people in contract can claim for damages or sue the people for damages
A contract can be defined as an agreement creating obligations that are enforceable by law. It is a written or orally expressed agreement between two or more parties to perform a service, provide a product or commit to an act and is enforceable by law. There are several types of contracts, and each has specific terms and conditions. The basic elements are mutual assent, consideration, capacity, and legality.
This rule can be illustrated in an example where A makes an offer by post to sell a land to B. The next day, A decides to revoke the offer and thus A puts a letter in the post to B revoking the offer. Before the revocation offer reaches B, B has posted a letter accepting the offer to A. The revocation letter posted by A only reaches B after the posting of letter of acceptance. In this example, A cannot revoke the offer because B has already accepted the offer. There is a contract formed at the moment when the letter of acceptance is posted, no matter the letter comes to the knowledge of A, the