1. The Elements of a Legally Binding Contract

[DEFINITION] Contract: A legally binding agreement that can be enforced in a court of law.

  [DEFINITION] The Law of Contract: This sets out the rules for proving when a contract exists and when it is terminated.

  The elements of a legally binding contract are...

  1. Offer
2. Acceptance
3.Consideration
4. Intention to Contract
5. Consent to Contract
6. Capacity to Contract
7. Legality of Form
8. Legality of Purpose

  1. Offer

  An offer can be made...

   1. Verbally
2. In writing
3. By conduct

  An offer is terminated if it is...

  1. Revoked
2. Not accepted in time
3. Rejected

  2. Acceptance

  Acceptance of an offer can be accepted...

  1. Verbally
2. In writing
3. By conduct

  [DEFINITION] 3. Consideration: This is what each party offers the other as evidence of their agreement.

[DEFINITION] 4. Intention to Contract: This means that the parties in the contract must have intended to create a legally binding contract that could end up in court if not fulfilled.

  The two assumptions made by contract law are that...

1. Business agreements are intended to be legally binding.
2. Social and private agreements are not intended to be legally binding.

  [DEFINITION] 5. Consent to Contract: This means that each party must give genuine agreement of their own free will to the making of the contract.

  Consent to enter a legally binding contract may not exist if...

  1. A person is pressurised against their will into entering a contract.
2. A person enters a contract as a result of deliberate misinterpretation or dishonesty by others.
3. A genuine mistake can be shown to have happened.

  [DEFINITION] 6. Capacity to Contract: This means that the people agreeing to the contract must have the legal right to do so.

  The people who do not have the legal right to enter into a contract are...

  1. Those who are under 18.
2. Those who are intoxicated or insane or 'of unsound mind'.
3. Those companies who are outside of their legally stated purpose as set out in its Memorandum of Association.

  [DEFINITION] Ultra Vires: This is when a company enters into a contract which is outside of its legally stated purpose as set out in its Memorandum of Association.

  [DEFINITION] 7. Legality of Form: This means that certain contracts must be drawn up in writing before they can become legally binding.

  [DEFINITION] 8. Legality of Purpose: This means that for a contract to be legally binding, it must be for a legal purpose, and not involve committing any crime or breaking any law.

	Created by amanda.acton almost 11 years ago

Leaving Certificate Business (Ch. 2 - Resolving Conflict in the Marketplace) Note on Chapter 2 - Resolving Conflict in the Marketplace [Notes], created by amanda.acton on 27/01/2014.