Briefly discuss the key elements of a binding contract.
Binding Contract
A binding contract is when two or more parties or entities that come to a mutual agreement that will be put into effect by the law. A contract is then called binding because if any one party doesn’t live up to what was written in the document then the law will impose penalties.
There are three key elements of a binding contract:
Offer
The first one is an Offer: An offer is a completely clear statement that has all the terms on which the offeror is ready to go into business with the person the offer is being communicated. There are two kinds of offers, one is a bilateral offer and the other is a unilateral offer. A bilateral offer is when a promise has been made in return
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This means that he was inviting offers and in legal terms this is called an invitation to treat. Fisher v Bell (1961) is also an example the court said that any product that is placed on displays in shops are not necessarily offers but are an invitation to treat because the shopkeeper has the right to decide what price he want to sell the item for.
The tag that was on the vase in the window was just an invitation to treat and not a postal rule because the rule doesn’t apply to invitations to treat but it only applies to offers. Ben made an offer to buy the vase from John using a letter, the decision to accept the offer was in John’s hands as long as he doesn’t make any contractual agreement he isn’t obliged to sell the vase to Ben.
John and Chet
Chet makes a real offer of 400 pounds to buy the vase from John. John responded to the offer by making a counter-offer like in the case of Hyde v Wrench (1840) of selling the vase to Chet for 450 pounds but Chet repeated his offer of 400 pounds but this was by making a counter offer to the new offer that John made. Chet was firm on his offer and insisted that he would only pay 400 pounds for the vase, which means that he didn’t accept John’s offer of 450
The Mailbox Rule is an area of Utah state law that declares the contract to be effective once the person accepting terms of said contract delivers it to a mailbox. The buyers stated in Addendum No. 2 that if they had not heard back from the seller by 12 a.m. that day, they would consider their counteroffer accepted. The seller was aware of the Mailbox Rule and delivered the accepted contract to a mailbox at 10:15 p.m.. The seller then experienced a phenomenon known as seller’s remorse, and left a voice message for Jon and Marsha at 12:30 a.m., thirty minutes past the proposed
When discussing the concept of contract law, there exist two bodies of legal rules that may apply to the contract. These bodies are the common law of contracts and Article 2 of the Uniform Commercial Code or the UCC. The common law of contracts is court made and is constantly changing, but the UCC is required in every state within the U.S.A. It is important to know which one to use and when, as well as what the differences between them are.
-Conditional acceptance: includes new terms that are not contained in the offer (viewed as new offer that must be accepted).
2014). Moreover, binding contract is made at the time and place when the letter of acceptance is posted. In the case of Adams v Lindsell (1818) 106 ER where Lindsell wrote to Adam offering him some wool and asked him to reply by post too. However, Lindsell’s letter was delayed in the post. The day Adam received the letter, he immediately replied with an acceptance letter but before it could reach Lindsell, she had sold the wool to other party. This leads Adam to sue Lindsell for breaching of contract. The court is on Adam’s side as there was an agreement made the moment he posted the acceptance letter to Lindsell (the postal acceptance rule). Moreover, Lindsell cannot argue the mode of acceptance used by Adam as she was the one asking him to do
Since the elements were met to satisfy an actual contract being made, with promises albeit moral and legal, the behavior in which Johnny executed warrants a breach of contract on his part. Also to note is Johnny is not a merchant under the Uniform Commercial Code (UCC), which defines a merchant as “a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction” (American Business Law Journal, 1970). Had Mark been identified as a merchant, he would have been held to a different set of rules and Johnny would have been protected, but Mark is a casual seller and not held to a higher standard of
The case presented is that of Sam Stevens who resides in an apartment. He has been working on an alarm system that makes barking sounds to scare off intruders, and has made a verbal agreement with a chain store to ship them 1,000 units. He had verbally told his landlord, Quinn, about his new invention and Quinn wished him luck. However, he recently received an eviction notice for the violation of his lease due to the fact that his new invention was too loud and interrupting the covenant of quiet of enjoyment of the neighbors and for conducting business from his apartment unit.
One of the controversial issues in the law of contract formation has always been the issue of distance contracts. Matters regarding to the types of rules that should be used to govern this type of contracts have always been a topic of debate. One of these rules includes the age old Postal acceptance rule also known as the “postal rule” or the “Mailbox rule”. This paper seeks to examine the justification of the postal acceptance rule and its place in the modern world with the emergence of electronic means of communication
Four requirements for a valid contract that is legally binding are: agreement, consideration, contractual capacity, and legality. Any contract
An offer can be made to one person or a group of persons or to the world at large. 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 conduct.
Therefore this case holds the legal principle (as seen in Contract Law pg 13) that offers can be addressed to the general public and are accepted when the offer is acted upon by a member of the general public. A similar case provided by the Court of Appeal is Bowerman v Association of British Travel Agents Ltd (1996) where the Association of British Travel Agents made an offer to the public at large that they would reimburse any money paid in respect of their holiday arrangements if the holiday was cancelled. This case reinforced that offers can be made to the whole world like that shown in
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.
This judgment given set criterion which is still been used in the modern court system and due to this case it was developed that an offer of contract can be unilateral and doesn’t have to be made to a specific party only. Also it was developed to that the acceptance of an offer does not require a notification and that once the concerned party purchases the product the contract is active then and there itself. And it was also established that purchase of an item is a fine example of consideration and therefore makes it a valid contract. (Smith, 2000).
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,
Offers is the promise made by the offeror and it must be distinguished from invitation to treat it also has a general rule that advertisement or brochures or price list amount to invitation, it cannot be defined as a valid offer. In this case Tony as an offeror he only advertised to invite consumer to treat according to the case Partridge v Crittenden [1968] 1 WLR 1204 generally this advertisement cannot be regarded as offer and there is no promise between Tony and Emma at beginning. Even though this advertisement
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.