Elements of a Legally Binding Contract (8) (1) Offer (Three ways:…
Elements of a Legally Binding Contract (8)
Every contract must contain an offer.
Verbally eg: "I'll give you €10,000 for that car"
By conduct eg: customer handing over money and magazine to shop assistant.
Can be terminated if:
Revoked - withdrawn before acceptance.
Not accepted in time (where there's a time limit) eg: CAO offers.
Rejected by other party.
Other person agrees to all terms of the offer.
By conduct eg: shop assistant taking customers money in exchange for magazine.
Each party must give something of value.
Consideration - what each party offers the other as evidence of the agreement.
4) Intention to Contract
Both parties must have intended to create legally binding contract that could end up in court if not fulfilled.
5) Consent to Contract
Each party must give genuine agreement of their own free will.
Consent may not exist if:
Person is pressurised against their will.
Enters as a result of deliberate misrepresentation or dishonesty by others.
Genuine mistake can be shown to have happened.
6) Capacity to Contract
Person agreeing to contract must have legal right to do so.
Anyone under 18 except for items such as clothes, food etc.
People who are intoxicated, insane of of 'unsound mind'
Company cannot enter into contracts which are outside what they're supposed to be doing eg: company selling cars cannot open a hotel.
7) Legality of Form
Certain contracts must be drawn up in writing before can be legally binding eg: hire purchase, insurance policies.
8) Legality of Purpose
For contract to be legally binding, must be for legal purpose and not involve committing any crime or breaking any law.