Question

Unit 2: Contract Formation, Capacity, Legality, and Intention

1. describe the elements of a valid contract,

2. identify issues that affect the legality of a contract, and

3. assess if an offer or an acceptance may have occurred.

Answer 1

1. A contract is binding agreement between one or more parties. According to salmond an agreement creating and defining obligations between the parties. A contract is an agreement enforceable by law .The partie are promisor and promisee

The elements of contract - a. Offer- one person signifies to another his willingness to do or abstain from doing something with a view to obatin assent.

B. Acceptance - if a peron to whom the proposal made signifies his assent then it is said to be accepted.

C. Consideration - an agreement to do something for return. It should be at desire of promisor.

D. Free consent - not under coercion, undue influence .

E. Capacity of parties - minor, Insane cannot enter into contract.

2. Issues affect contract are - a. Unlawful consideration there should be lawful consideration. Consideration should be at the desire of the promisor .

B. Incapacity parties - if contract made by minor and insane it will be not valid.

C. Under coercion , undue influence if contract is made is voidable by the parties.

3. If an offer is made by promisor signifies to another his willingness to do or abstain from doing anything to obtain assent from promisee.

It become valid on the acceptance only. It can be revoked before communication is acceptance is complete it come into force on the acceptance .

Acceptance - it is the consent to fulfill the promise made by promisor. The acceptance should be done with a specified period prescribed by promisor. Hence the contract will come into force. If the acceptance is rejected there will be no contract.