In this article, you will learn about the content of contract law, this topic is very important from an exam point of view because there is a lot of chance to come 4 to 5 questions from the Contract law topic.
What Is The Element Of a Valid Contract In Law?
- Agreement: offer and acceptance, can be written or oral.
- Consideration
- Expect or intention to create legal relation
- Capacity: Legal power
- Legality
What Is Contracts Form In Business Law
General rules: These contracts can be done or conducted by the parties, and they can be in form of written or oral, and these are also called “simple contracts”
Exception: some contracts should be in written form such as the company’s share transfer and property papers.
Specialty Contract: These contracts are in written form, properly signed have witnessed such as leases. They might be for 6 or 12 years.
Subject to contract: It refers to the agreed term means until the contract is not completed you can not do any case or complain.
What Is An Offer In Contract law?
An Offer means a specified term without any negotiations and which can not be changed, and if anything changes then this is not an offer that is an invitation to treat.
It can be in form of oral and written but is not effective until communicated to the person to whom the offer is given.
What Is Termination of an Offer In Contract Law
Terminated offer can not be accepted, offer can be terminated by:
Revocation: It means whether a person is interested in your offer but still did not accept that offer.
Rejection: not accepting an offer, for example, x want to sell his car at $5000, One of the buyers Y said that he will buy but will pay only $4000. In other words not accepted by both parties.
Lapse: Crossing the time limit may be happened because of the death of the offeror or offeree, failure to meet the condition, or after the expiry or specified time.
What Are Tenders in Contract law
What Is An Auction In Business Law
Advertise to sell something but it is not an offer but yeah It is an invitation to treat, you may sell or not and that is decided by the hammer.
Example: you have a painting that is a wonder itself and people are crazy to buy that painting. You set up a program for selling that painting and call the people who wanted to buy it, you keep the $1000 minimum price of that painting. One of the buyers calls for $1500, the second one calls for $2000, there was one of the big fans of your that painting and he calls for $5000 to buy the painting and your hammer falls and now you have to sell and then this will be called an offer.
What Is Valid Consideration in Contract law
Consideration means some exchange that might be something related to products and it may be in monetary form. We can say that consideration is the promise to the party on any contract.
The basic rule is in every simple contract there must be a consideration from each party that supports the contract.
Executory Consideration: the promise of paying in the future example cash on delivery.
Executed Consideration: When the contract is made at the same time consideration has to pay.
Sufficient Consideration: There must be a suitable or supported amount, sufficient but not adequate.
Past Consideration: The promise that is made after the work or contract is completed.
For Example, If a friend pays for a movie ticket without informing his friend then his friend said and made a promise that he will pay that amount.
Note: Performance of an existing statutory duty is not sufficient consideration or consideration. And an illegal act is an insufficient consideration or amount to consideration.
Promissory estoppel
The promissory estoppel is based on rules and principles of fairness and justice. it prevents someone to go back to his promise to accept a small and lesser amount.
Privity of Contract law
Only the parties to a contract can acquire rights and obligations under it.
If person A contracts with person B then they can only case on each other. But if a third party is involved in the contract whether it takes benefits or not from that contract, it will be involved because the name and the description of the third party are mentioned in the contract.
What Are The Main Types Of Contracts In Business Law
Collateral contract
A collateral contract is one in which the participants to one deal sign or pledge to sign an additional contract. As a result, the two contracts are linked, and although it is not a constructive component of the initial contract, it can be executed.
For example, if you take a loan from a bank then you have to give or keep something to the bank this is because in the event that you will not able to pay the loan on time, the bank can sell that property or anything which you keep to the bank for consideration.
Express Contact
A contract is made through words in written form or can also be oral at the time of contract formation.
Implied Contract
The contract is made silently for example you go to a shop and take a soap without the shopkeeper’s permission and paid him and return back. In this whole process, you do not even talk a single word to the shopkeeper nor he talks.
Unilateral Contract
An agreement or contract in which one party promises to pay a certain amount in exchange for a specific action, such as an agreement to pay compensation for the return of an item or items. Since a contract is made when the item or the items is returned, acceptance does not have to be communicated in these circumstances.
Standard Contract
Big businesses or firms create a document that lays forth the terms on which their consumers will trade with them. There is no room for bargaining; the customer must either accept or reject the terms. In the other alternatives, there is room for discussion in the contracts.
What Is Renunciation in Contract law?
One side declares that they will not carry out their commitments. When one party declines to execute the work. When one party expresses an intention not to perform or specifically announces that they will not be able to fully perform their responsibilities under the contract in some key regard, this is known as renunciation. The renunciation can happen before or during the act.
What Is Breach of Contract In Business Law
Whenever one party to a legal agreement fails to fulfill the current or original agreement or obligations, it is called a “breach of contract”.
If party A contracts with party B on supplying goods on the specified date but can not fulfill the order then this is said to be a “Breach of Contract” in contract law.
Repudiatory Breach of Contract
In this case, the innocent victim or party may confirm the deal and proceed to fulfill their responsibilities. If they plan to break the contract, they must notify the other party. They can sue for damages or declare the deal null and void. They have the authority to decline to pay for work that has already been completed in part or in a poor manner.
What Is the Intention to create legal relation In A Contract?
If the parties want to do a contract then they must be entered into a legal relationship. If the intentions are not clear then can also understand according to the agreement and types of agreement.
Note: If there is no intention to be legally bound, this is known as a “domestic or social agreement” and if there is the intention to be legally bound this is said to be a “Commercial Agreement“.
What Are Unliquidated Damages
For contracts that do not have any provision for damages, the court may help in determining the payable damages these are classified as unliquidated damages.
These factors are considered when determining the Unliquidated damage amount.
- What or which loss can be claimed
- Amount of loss
The remoteness of losses: These losses can not be recovered and these are referred to as “too remote” which means deep loss.
The measure of damages: How much (loss) can be measured in monetary terms or in amount? This is sometimes described as “damages for loss of bargain“.
Quantum Meruit
A contractual work that has already been done or performed can be measured.
There is party A and party B both contracted with each other. A has done its work but B refuses to pay now A has the right to claim his amount.
Equitable Remedies
These depend on the court’s decisions.
| Specific performance | Requires to perform his work or obligations |
| Injunction | Order someone to do something or not to do, it may impact negatively on contract |
| Rescission | Back to the starting position |
What Are The Major Stages Of A Parliament Act
- First reading
- Second reading, Committee stage, and Report stage
- Third reading
Parliament Act Stage is very important in the “Contract Law” chapter and it is usually examined in the exam.
Obiter Dicta: It is an opinion or judgment which is really not necessary in the case.
Exclusion Clause in Contract Law
It prevents the right and liability of the innocent party, which means if the contract is breached then the party is not liable for paying liability if there is a breach of rules, and laws, and contract.
Anticipatory, Actual, And Fundamental Breach In Contract Law
Anticipatory Breach: A party refuses to fill the obligations before on due date or in advance.
Actual Breach: A party refuses to fill the obligations on the due date.
Fundamental Breach: This breach occurs on the conditions such as failing to give expected service.
| Quantum Meruit | Claim for a reasonable amount of damage |
| Action of Price | Pay according to the contract |
| Restitution | Order from the court for recovery of the loss |
| Pure Economic Loss | It is a financial loss that can not be seen physically but can be seen in the statement of financial position |
| Contributory Negligence | When a person to fail for cares in doing something, he is responsible for his own injury and will contribute to the loss |