Ricky

Introduction

Contract law is a very important branch of the law for all of us because we contract with each other every day. The vast majority of the contracts pose no problem- they are usually a simple interchange of cash for goods- but when they get more complicated they can, and do, go wrong.This is less likely to occur when the parties to the deal understand what they are doing,what their rights and obligation are how to recognise potential problems.The purpose of this section is to give you an outline , in simple terms, of contract law and to help you understand when you need to get professional help. It is somewhat superficial but it should give you basic understanding of what is needed to from a legally binding contract.

What is contract?

A contract is a legally binding promise or a set of promises between two parties.In order for a contract to be valid certain requirements must be met – see requirements for a contract to be legally binding.

Essential of a valid contract

The essential integredients of a contract are:

1. Agreement

2. Offer

3. An Invitation to treat

4. Acceptence and counter offer

5. Consideration

Agreement:If most people were asked to define a contract, the word 'agreement' would probably be part of their definition. However, there are distinct aspects to an agreement that need to be considered at law. The two main aspects, which must be present in any contract for it to be binding, are offer and acceptance. One party must make an offer that the other, clearly and unmistakably, accepts. They then have a binding contract (provided other criteria are also met).

Offer: One party must, at some stage in negotiating the contract, make an offer that indicates that they intend to be bound in a contract with the other party if the offer is accepted. In a contract for the sale of goods, for example, the offer must identify the item that the offeror wishes to buy or sell and the terms they propose - the price or the...