Chapter 2 - Resolving Conflict in the Marketplace [Notes]

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.

2. The Termination of a Contract    [DEFINITION] Termination of a Contract: This means a contract can no longer be legally enforced.        A contract can be legally terminated by...            1. Performance: The fulfilment of all obligations by all parties as agreed.            2. Agreement: The agreement by all parties to terminate the contract.            3. Frustration: The prevention of the contract being completed by the happening of some unforeseen event(s).            4. Breach of Contract: The breaking of a condition of the contract by one of the parties involved.                [DEFINITION] Condition: An essential element of a contract.                [DEFINITION] Warranty: A non-essential element of a contract.

3. The Remedies for Breach of Contract    When a condition of a contract is broken, you can...        1. Rescind the contract.        2. Sue for financial compensation.        3. Seek 'specific performance'.

4. The Legislation That Protects Consumer Rights    [DEFINITION] Caveat Emptor: A legal term meaning 'Let the buyer beware'.    The two pieces of legislation that set out consumers' legal rights and sellers' responsibilities are...        1. The Sale of Goods and Supply of Services Act 1980        2. The Consumer Protection Act 1980

5. The Sale of Goods and Supply of Services Act 1980    [DEFINITION] The Sale of Goods and Supply of Services Act 1980: This piece of legislation sets out...                                                                                                     1. The legal rights of consumers when they purchase goods.                                                                                                     2. The legal responsibilities of retailers to consumers.                                                                                                     3. The legal remedies available.        The legal rights of consumers are that...            1. Goods sold must be of merchantable quality.                [DEFINITION] Merchantable Quality: Goods sold to consumers must be reasonably durable, even if they are sale items.            2. Goods sold must be fit for the purpose intended.            3. Goods sold must be as described.            4. The buyer is entitled to legal ownership and quiet possession.            5. Services must be provided by a competent person.            6. Consumers who are renting or buying on hire purchase have the same rights as someone buying goods by paying upfront with cash.        The legal responsibilities of retailers are...            1. To be responsible for any defects in any product they sell.            2. To respect all the legal rights of customers.            3. To deal with all complaints.            4. To be held responsible for any signs pretending to limit the retailer's liability.            5. To give customers clear and specific written guarantees if offered.            6. To not demand payment for unsolicited goods sent to customers.        The remedies available to consumers are...            1. Repair            2. Replacement            3. Refund

1. The Elements of a Legally Binding Contract

2. The Termination of a Contract

3. The Remedies for Breach of Contract

4. The Legislation That Protects Consumer Rights

5. The Sale of Goods and Supply of Services Act 1980