List and explain the elements that are required for an agreement to be a contract.
QUESTION: List and explain the elements that are required for an
agreement to be a contract. In your answer, consider void and voidable contracts, formal and parol
contracts, unenforceable and illegal contracts, implied terms, unilateral contracts, gratuitous promise,
seals, offer, acceptance, and consideration
Introduction
Offer, communication of the offer and Acceptance
For a contract to be binding, there has to be an offer, communication of the offer and acceptance
which should be unconditional and in a manner requested by the offeror. Conditional acceptance
or cross offers makes the offer voidable at the option of the offeror (McKendrick, 2011). The
offer has to be communicated to the offeree as in the case of Gibson v Manchester City Council
(1979).
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Contractual Capacity
It’s the ability to contract or as in the case Nash v Inman (1908) 2 KB 1, minors without
contractual capacity can be allowed to contract but only for reasonable necessaries. Minors,’
incompetent persons such as persons of unsound minds and intoxicated persons have limited
contractual ability (Poole, 2012). Voidable contracts are made with persons who have no
contractual capacity like minors and persons of unsound minds as in the case of Ryder v Wombell
(1868) LR 4 Exch, 32.They can be ratified at the options of the minors as stated in Minors
Contracts Act (1987) UK.
Consideration
This is like the price of the contract. For instance the price of selling a bicycle is the
consideration for the seller to exchange the bicycle (Beatson, 2010).
Intention to create legally binding agreement
For a contract to be binding both parties must have the intention of creating a legally binding
agreement between themselves (Beale, 2007). Unenforceable contracts are contracts that have no
intention of creating legally binding relationships like a gentlemen promise to buy a gift for a
wife. They also have no consideration.
The subject of the contracts must be legal. Contracts that are illegal are not binding and cannot
be enforced (Brownsword, 2010).
Illegal contracts are contracts that lack one or more of the elements of a valid contract. Contracts
without proper offer and acceptance that’s acceptable are void.
Contracts must also be capable of performance while implied contracts are contracts that are
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acceptable by the conduct of the parties. For example when bordering a vehicle there’s an
implied contract that on payment of a certain of money, the driver will provide transport services
to that destination. By paying the stated amounted amount the passenger has accepted the
contract and performed his part of the contract and it’s the duty of driver to transport him to his
destination as the contract has been sealed by the passenger (McKendrick, 2012).
A unilateral contract is a promise to pay in return for the actual performance by the other party.
For example, one can promise a mechanic $1000 if he fixes the car by evening. Gratuitous
contracts are for the benefit party to whom it has been made to without any consideration.
Informal or Parol contracts are simple contracts and they are not under seal or record. They may
be oral or in writing. All the contracts under seal must be written. Formal contracts are contracts
that are on record and under seal
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References
Beatson, J., A. (2010) Burrows and J. Cartwright Anson’s law of contract, Oxford: Oxford
University Press, [ISBN 9780199282470].
Beale, H.G., W.D. (2007) Bishop and M.P. Furmston Contract – cases and materials,
London: Butterworths, [ISBN 0199287368].
Brownsword, R. (2010) Smith & Thomas: A casebook on contract, London: Sweet &
Maxwell, [ISBN 9781847034175].
Gibson v Manchester City Council (1979)
McKendrick, E. (2012) Contract law: text, cases and materials. (Oxford: Oxford University
Press, [ISBN 9780199699384].
McKendrick, E. (2011) Contract law, London: Palgrave Macmillan.
[ISBN 9780230285699].
