Question

Please answer the following questions, your response should be in WORD and not exceed more than two pages in length:

1. Describe the differences between express contracts(written and oral), and implied contracts.

2. What are the major elements of a contract? Please describe each of them.

Answer 1

Solution 1.

Express Contract:;

It is defined as the contract, in which the parties to the agreement, either orally or in written form, states the terms and conditions of the contract. In short, when the offer and acceptance of the agreement are communicated verbally, then the contract is said to be express.

*Contract creation by words.

Example:-

1)Leasing agreement

2)Monty writes a letter to Himanshu, offering to sell his house to him for 3 crore. Himanshu, by a written letter, gives his acceptance of the proposal.

Implied Contract:-

It is defined as the contract in which the elements, i.e. offer and acceptance is made, without the use of words, then this type of contract is known as implied contract. Such a contract come into being from the assumed intention of the parties.

*Contract creation by conduct or behavior.

It can be of two types:-

1)Implied by law: A contract is said to be implied by law in which the parties have no intention to enter into the contract. However, the law imposes an obligation to perform the contract, irrespective of the consent of the parties. For example: Madhu, gives books to Jackson by mistake, which belongs to Sam. Now, it is Jackson’s obligation to return the books to Madhu; even there is no intention to get into the contract.

2)Implied by fact: In this; the obligation is created between the parties, on the basis of the circumstances and actions. For example: Purchasing groceries from mall.

Solution 2.

ELEMENTS OF A CONTRACT:-

1) Offer :-

One of the parties made a promise to do or refrain from doing some specified action in the future.

2) Consideration : -

Something of value was promised in exchange for the specified action or non-action.

This can take the form of a significant expenditure of money or effort, a promise to perform some service, an agreement not to do something, or reliance on the promise.

Consideration is the value that induces the parties to enter into the contract.

The existence of consideration distinguishes a contract from a gift. A gift is a voluntary and gratuitous transfer of property from one person to another, without something of value promised in return.

Failure to follow through on a promise to make a gift is not enforceable as a breach of contract because there is no consideration for the promise.

3. Acceptance : -

The offer was accepted unambiguously. Acceptance may be expressed through words, deeds or performance as called for in the contract. Generally, the acceptance must mirror the terms of the offer. If not, the acceptance is viewed as a rejection and counteroffer.

If the contract involves a sale of goods between merchants, then the acceptance does not have to mirror the terms of the offer for a valid contract to exist, unless;

✓ the terms of the acceptance significantly alter the original contract;

or

✓ the offeror objects within a reasonable time.

4. Mutuality :-

The contracting parties had “a meeting of the minds” regarding the agreement. This means the parties understood and agreed to the basic substance and terms of the contract.

When the complaining party provides proof that all of these elements occurred, that party meets its burden of making a prima facie case that a contract existed. For a defending party to challenge the existence of the contract, that party must provide evidence undermining one or more elements.