02.Contract.pdf

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Legally enforceable agreement entered voluntarily

by two or more parties

Bilateral

(there is an exchange of promises between the

parties to carry out acts

both parties are bound from the beginning)

Consists of rights and obligations that each party

must perform.

Failure to perform will result in breach of contract

and the right of a party to sue for damages.

one party offers to do something in

return for an act done by the other party

only the party offering something is

bound from the beginning

offers made to more than one

party or to ‘world at large’

contract only comes into existence when

party complies with terms of the offer

Carlill v Carbolic Smoke Ball Company (1893)

Types of

contract

Unilateral

Contract

Legally

enforceable

agreement

When an agreement becomes legally

enforceable, it is considered a contract

There must be an agreement

(offer and acceptance)

Parties must possess the intention

to create legal contract

For it to become

legally enforceable

Consideration must be exchanged

The terms of contract must be

expressed with a degree of certainty