Contract LAW

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Transcript of Contract LAW

2008 OctoberContract Law

Hasitha Veenath Kodithuwakku BTEC HND in QS & BE QS/08/23

ContentsExecutive summary ............................................................................................................................ - 3 Introduction........................................................................................................................................ - 4 Formation ........................................................................................................................................... - 5 Offer ............................................................................................................................................... - 5 Acceptance ..................................................................................................................................... - 7 Intention to create legal relations ................................................................................................ - 12 Social and Domestic agreement ............................................................................................... - 12 Business or Commercial agrrement ......................................................................................... - 13 Consideration ............................................................................................................................... - 14 Types of Consideration ............................................................................................................. - 14 RULES GOVERNING CONSIDERATION ...................................................................................... - 15 Part Payments of Debts ............................................................................................................ - 18 Promissory Estoppel ................................................................................................................. - 19 Capacity ........................................................................................................................................ - 20 MINORS .................................................................................................................................... - 20 MENTAL INCOMPETENTS ......................................................................................................... - 21 Bankruptcy ............................................................................................................................... - 22 Enemy aliens and/or terrorists................................................................................................. - 22 Business entities ....................................................................................................................... - 22 Consent ........................................................................................................................................ - 23 Mistake ..................................................................................................................................... - 23 Misrepresentation .................................................................................................................... - 27 Types of Misrepresentation ..................................................................................................... - 27 Duress ....................................................................................................................................... - 29 Duress to the person ................................................................................................................ - 29 Duress to goods ........................................................................................................................ - 29 Undue Influence ....................................................................................................................... - 30 Unconscionable conduct .......................................................................................................... - 31 Hasitha Veenath QS/O8/23 -1-

LEGALITY ....................................................................................................................................... - 32 Content ............................................................................................................................................. - 34 Representation ............................................................................................................................. - 34 Terms ............................................................................................................................................ - 35 Condition .................................................................................................................................. - 35 Warranty .................................................................................................................................. - 35 Intermediate terms .................................................................................................................. - 36 Termination of a contract ................................................................................................................ - 36 Termination by Frustration .......................................................................................................... - 36 Termination by breach ................................................................................................................. - 37 Actual breach............................................................................................................................ - 37 Anticipatory Breach .................................................................................................................. - 38 Conclusion ........................................................................................................................................ - 39 Reference List ................................................................................................................................... - 40 -

Hasitha Veenath

QS/O8/23

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Executive summary

This report is in based on the assignment which was given by Mr. Seewali Amithirigala. Under his excellent guidance I tried my best to collect relevant information about contract law from every resource I could reach. To that I have gone through some books as well as surfed through some websites. Lectures conducted and the notes given by Mr. Seewali were also very helpful when preparing the report. The report will discuss about formation, Contents, Termination of a contract. Each part is separately discussed using sub categories. All relevant rules are explanatorily discussed in each sub category. By completing this report I have accomplished more than a reasonable knowledge about CONTRACT LAW.

Hasitha Veenath

QS/O8/23

-3-

IntroductionA contract intends to formalize an agreement between two or more parties, in relation to a particular subject. Contracts can cover an extremely broad range of matters, including the sale of goods or real property, the terms of employment or of an independent contractor relationship, the settlement of a dispute, and ownership of intellectual property developed as part of a work for hire.

By classification a contract may be a Contract by deed A formal legal document is signed, witnessed and delivered to create contract. Simple contracts These are informal and may be made in writing, orally or they may be implied from

Those can either be a bilateral contract (exchange of one promise for another) or a Unilateral contract (an agreement to pay in exchange for performance, if the potential performer chooses to act).

Elements of a ContractEssential elements of a contract are accordingly consideration, Intention to create legal relations, Capacity, Consent and Legality. A contract which possesses all these requirements is said to be valid. In addition, a contract consists of various terms & representations. The absence of an essential element will render the contract to be void.

Termination of a contractThere are many ways to terminate the obligations of a contract. Most often, parties conclude their contract obligations by performing them. However, sometimes problems arise and parties cannot or will not complete their obligations under the contract. Therefore, contracts may be terminated by reasons of rescission, breach, or impossibility of performance.

Hasitha Veenath

QS/O8/23

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Contract LawFormationIt is generally accepted that four essential elements are necessary for contract formation: 1. 2. 3. 4. an agreement; consideration (generally, the supply of money, property or services); certainty in what the contract requires to be done, or restricts from being done; intention by the parties to enter into legal relations

The foundation of the legal relations called contract is the agreement of the parties. In order for an agreement to be a contract (or a variation to an existing contract) it must be supported by consideration. The agreement must also be sufficiently certain and complete to be enforced in the courts and the parties must have intended their agreement to be a contract. The absence of any of these elements will signify either that there is in law no agreement or that the agreement is not enforceable as a contract. The first requisite of any contract is an agreement. At least two parties are required in a contract; one of them, the Offeror, makes an offer which the other, the offeree, accepts. An agreement between two parties only exists when the offer made by the Offeror is accepted by the offeree. Simply an agreement consists of offers and Acceptances. Offers and Acceptances can be fulfilled basically in two ways. o Express o Implied -stated