Elements Of Contract

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A contract is an agreement between two or more parties to create legal obligations which are enforceable by law. The contracting parties must have the same understanding of the terms before a contract is formed. The four essential elements of a contract are offer, acceptance, consideration and intention to create legal relations. Offer is a statement by one party to a contract that he or she proposes to do something. An offer may be communicated in writing, orally or by conduct. It can be made to a specific person, a class or group of persons and the world at large. Revocation or withdrawal by offeror, rejection by offeree, lapse of time and death would make an offer come to an end. However, ‘invitation to treat’ is not an offer. It is only…show more content…
It must be an unqualified and unconditional assent of the offer. General rule stated that an acceptance needs to be communicated and the communication of acceptance is complete when it is actually received by offeror. The communication of acceptance can be oral, written or by conduct. The exceptional situations are postal rule of acceptance, silence and waiver of communication. Consideration is something paid by one person in exchange for another person promising to do something. The rule of consideration is one party need not to pay a price which is equal in value for which it is given. Furthermore, consideration cannot be something that promisee is entitled to do. Only the parties who have provided consideration are enforced by the promise. There is no consideration if the act performed before the promise is provided. Intention to create legal relations is both contracting parties agree to intend their agreement to be legally binding. The party is liable to be sued in court if he violates the contract. Law classified the contract as commercial agreements and social & domestic agreement to determine the presence of this intention. Law usually assumes that intention to create legal relation is exist in commercial…show more content…
Based on postal rule, acceptance is complete and effective once the offeree posted the acceptance letter to a right address. In Adams v. Lindsell, the offeror mailed an offer on 2 September 1817. The offeree only received the offer on 5 September 1817 due to postal delay and immediately mailed the acceptance letter at the evening of same day. The offeror received the acceptance on 9 September 1817 but he expected to receive the acceptance on 7 September 1817. Meanwhile, the offeror sold the wood to third party. The court held that there was a valid contract since the offeree posted the acceptance letter on 5 September
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