Essential parts of Valid Contract

9 important questions on Essential parts of Valid Contract

What are 4 elements of Contract Law

Contract may be verbal or in writing may not be made by family members.   In order to be valid must have capacity (not a minor), not a family member, not under duress and transaction must not be illegal.

  1. Offer & Acceptance
  2. Consideration
  3. Intention to create legal relations
  4. Capacity 

What are the 4 elements of a contract?

Mutual assent (offer and acceptance), consideration, capacity, and legality

What are the defenses to the enforceability of a contract? (2)

a. Voluntary Consent- cannot be forced to enter
b. Form- must be in whatever form the law requires
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Social or Family Members (intention create legal contract - Case Law

Balfour v Balfour [1919]

A husband worked overseas and agreed to send maintenance payments to his wife. At the time of the agreement the couple were happily married. The couple later separated and the husband stopped making the payments. The wife sought to enforce the agreement.

Held:

The agreement was a purely social and domestic agreement and therefore it was presumed that the parties did not intend to be legally bound.

Intention to Create Legal intentions - Case Law.

Simpkins v Pays [1955] Ms. Simpkins was renting and lived with her granddaughter. They frequently entered into newspaper competitions. The three agreed that she would fill in a weekly coupon and divide the prize in the event of winning.  The question arose as to whether there was an intention to create legal relations in the informal arrangement between the Parties so as to constitute a legal agreement to distribute the shares.

The Court held that the mutual arrangement, no matter how informal, constituted a legally-binding agreement to divide the shares in thirds.

Modern and Traditional View of Revocating Offers for Unilateral Contracts:

Traditional- a revocation terminates an offer
Modern- once performance has been substantially undertaken, the offer cannot be revoked

Executed Contract vs. Executory Contract

Executed- a contract has been fully performed by both parties
Executory- a contract that has not yet been fully performed

Plain Meaning Rule (contract interpretation)

if a court determines the terms of the contract are clear form the written document alone, the rule applies, and the contract will be enforced according to what it clearly states

When will a court consider a contract to be ambiguous? (4)

a. when the intent of the parties cannot be determined
b. when it lacks a provision on a disputed issue
c. when a term is susceptible to more than one interpretation
d. when there is uncertainty about ta provision

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