Contract Law

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A contract is a legally binding agreement between two or more parties that, if it contains the elements of a valid legal contract, is enforceable by law

Elements of a Contract

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Offer

Acceptance

Consideration

Intention to Contract

Capacity to Contract

Consent to Contract

Legality of Form

Legality of Purpose

Agreement is a contract if it contains all of the elements of a contract

Offer- The formation of a contract involves one party making an offer to another party

Termination of an Offer

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Revocation of Offer (withdrawal of the

offer before acceptance)

Rejection (offeree rejects the offer)

Lapse of Time (time has been stipulated)

Acceptance- The offeree agrees precisely to all the terms of the deal without any conditions

Consideration- This is something of value offered by a party to a contract in exchange for something of value received

Intention to contract- It must be the intention of both parties to create a legally binding agreement before a contract can validly exist

Capacity to contract- In order for an agreement to be a valid contract the parties to the contract must have the legal capacity to make a contract

Consent to contract-The parties to the contract must give their real, voluntary and genuine permission to enter into it

Legality of form-A contract must be drawn up in the correct legal form

Legality of purpose-This means that legally binding contracts can only be for legal transactions

Termination- Performance ,Agreement, Frustration, Breach of contract

Force majeure clauses are often found in contracts and insurance policies to protect the parties in the event duties cannot be performed due to causes outside the parties’ control