CONTRACT LAW2.1 Demonstrate understanding of Contract Law in tourism and hospitality industry.

2.1.1 Define the meaning of terminologies in Contract Law.

2.1.2 Discuss the fundamental elements of Contract Law.

2.1.3 Describe the implication of Contract Law to tourism and hospitality business activities.

2.2 Describe the legal consequences and liabilities for breach of contract

Contract in legal sense- agreement between 2 or more parties that is legally binding between them

S 2(H) CA- agreement enforceable by law

INTRODUCTION

Elements of

contract

Offer

Acceptance

Consideration

Intention to create legal

relation

Certainty

Capacity

S2(a) CA- when a person shows his willingness to do something or abstain (stop) from doing something, in exchange for something of value

Is a proposal to exchange promise

May be implied, express

Person making offer- offeror/ proposer/ promisor

Person receive offer- offeree/ promise

OFFER

Unilateral offer- no specific offeree in mind (general public)

Bilateral offer- offeree is identifiable (definite person/class of person)

CARLILL V CARBOLIC SMOKE CO LTD(1893) QB 256D was an owner of medical shop, advertised the medicine that claimed to heal all disease and offer to pay £100 if anyone not recover after take the medicine. P bought it, consume but don’t recover. P asked for claim but D denied.Court Held that offer is valid to all world, so D must pay to P

TYPES OF OFFER

Offer must be communicated to offeree before can be accepted.

S4(1) – proposal is complete when it comes to the knowledge of the person to whom its made

COMMUNICATION OF OFFER

Once open, remains until it lapses or withdrawn

S5(1) – proposal may be revoked any time before the communication…

TERMINATION OF OFFER

S6 CA

Lapses of time

Death/mental disorder

Communication of notice

Failure of the acceptor to

fulfill condition

REJECTION Offeree communicates his rejection

COUNTER OFFER Acceptance with modification Operates as rejection of original offer

INVITATION TO TREAT Non binding statement/conduct that invites interest

FISHER V BELL (91960)3 ALL ER 731D displayed flick knife with price tag. Later he been charged under Restriction Offensive Weapon Act.Court Held: displaying not amount to offer. Its merely invitation to treat

REJECTION, COUNTER OFFER,ITT

S2(b)- when person to whom the proposal is made signifies his assent thereto.

Agreement existed when offer accepted

Postal rule

ACEPTANCE

In your own group, set up a mini drama that shows the application of element of offer,

invitation to treat and acceptance of contract in real life.

Your drama must include and apply all the elements of contracts that you have learned

before.

10 minutes for each group

DISCUSSION 1

S26 CA- agreement without consideration is void

Something value exchanged for something else in value

CONSIDERATION

TYPES

TYPES OF CONSIDERATION

CONSIDERATION

Cont..

S10 CA- all agreement are contract if made by free consent of parties (competent to contract)

WHO ARE COMPETENT? Age of majority Sound mind Not disqualified from law

LEGAL CAPACITY

S30 CA- Agreement void for uncertainty

Term of agreement must certain and not vague

CERTAINTY

WITHOUT FREE CONSENT

COERCION UNDUE INFLUENCE

MISREPRESENTATION FRAUD

VOIDABLE CONTRACTEFFECT

VOIDABLE AT OPTION OF INNOCENT PARTY

RESCIND CONTRACT

CONTINUE CONTRACT

INSIST RIGHT POSITION BENEFIT

RETURNED

VOID AGREEMENTS

MISTAKE ILLEGALITY NO CONSIDERATION

VOID CONTRACT

EFFECT

NOT IN EXISTENCE BEGINNING

UNENFORCEABLE BY

LAW

RETURN BENEFIT

DISCHARGE OF CONTRAC T DISCHARGE OF CONTRACT

PERFORMANCE FRUSTRATION AGREEMENT BREACH

IMPOSSIBLE EFFECT

EFFECT BENEFIT

CONTRACT ENDS RETURN BENEFIT RETURN RECEIVE

REMEDIES

REMEDIES

DAMAGES SPECIFIC PERFORMANCE INJUNCTION QUANTUM MERUIT

DAMAGES INADEQUATE

PROHIBITORY INTERLOCUTORY MANDATORY

Q & A