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Discuss A Contract Validity Formed Is Considered As Law Discuss The Validity of This Sentence in Accordance With Essential Elements of Contracts

The key elements required for a valid contract are: agreement between two parties, capacity to understand the contract terms, consideration or exchange of value, and intention to create a legally binding agreement. For a contract to be valid, it must meet all four of these elements. Common types of contracts include employment agreements, property sales, and tenancy agreements for periods over 12 months, which generally must be in writing. If one party breaks the terms of a valid contract, legal remedies are available to the other party.

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Samuel Debebe
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37 views

Discuss A Contract Validity Formed Is Considered As Law Discuss The Validity of This Sentence in Accordance With Essential Elements of Contracts

The key elements required for a valid contract are: agreement between two parties, capacity to understand the contract terms, consideration or exchange of value, and intention to create a legally binding agreement. For a contract to be valid, it must meet all four of these elements. Common types of contracts include employment agreements, property sales, and tenancy agreements for periods over 12 months, which generally must be in writing. If one party breaks the terms of a valid contract, legal remedies are available to the other party.

Uploaded by

Samuel Debebe
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Discuss a contract validity formed is considered as law discuss the validity


of this sentence in accordance with essential elements of contracts.

A contract is a legally binding promise made between at least 2 parties in order to full fil an
obligation in exchange for something of value. Contracts can either be written, oral, or a
combination of both.

There are some contracts which must be in writing, including the sale of property or a tenancy
agreement for more than 12 months.

Contracts ensure that your interests are protected by law and that both parties will fulfill their
obligations as promised. If a party breaks the contract, there will be certain solutions available to
the parties (known as 'remedies').

Where possible, it is best to write a contract down. If the parties disagree on the terms of the
contract or they are unclear, it will be up to a court to decide what those terms meant. The court
will then have to look at how the services, promises, and exchanges were carried out in order to
identify the parties' intentions.

Key elements of a contract


For a contract to be valid, it must have four key elements: agreement, capacity, consideration,
and intention.

Agreement

Offer

An agreement happens when an offer is made by 1 party (eg an offer of employment) to the
other, and that offer is accepted. An offer is a statement of terms which the person making the
offer is prepared to be contractually bound to. An offer is different from an invitation to treat
which only invites someone to make an offer, and is not intended to be contractually binding. For
example, advertisements, catalogues and brochures where prices of a product are listed are not
offers but invitations to treat. If they were, then the advertiser would have to provide everyone
who 'accepted' them with the product regardless of stock levels.

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Acceptance

Acceptance of the offer must be unconditional (eg a signature on a contract of employment) and
it must be communicated. Any negotiations between the parties are counter-offers, not
acceptance.

Staying silent is not generally considered acceptance, unless it is clear that acceptance was
intended (eg by way of conduct, like paying for a product). What constitutes as adequate
acceptance will vary depending on the type of contract.

Capacity

All parties must have the ability to understand the terms of and any obligations under the
contract. Also, consent to the contract must be freely given (eg there cannot be any
coercion/force, fraud, undue influence, or misrepresentation).

These type of people generally lack the capacity to enter into contracts:

 children under 18 - unless the contract is for necessities (food and clothing) or education
(an apprenticeship or employment contract) and the terms are fair and benefit the child

 people suffering from mental health conditions or under the influence of drugs and/or
alcohol - only if the condition affects the person's ability to understand the nature of the
transaction or if the other party is aware of their incapacity

If a person lacking capacity has entered into a contract, it will generally be up to that person to
decide if they want to invalidate the contract.

Consideration

Parties must exchange some value for a contract to be binding. This is called consideration.
Consideration does not have to be adequate or for the benefit of the other person, it merely has to
be sufficient (eg if someone offers to sell their house for nothing, there is no consideration; but if
they offer to sell it for £1, then there is valid consideration).

Examples of insufficient consideration include:

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 an existing public duty (eg a police officer's duty to protect the public) or contractual duty
(eg the production of services already required by another contract)

 something with sentimental value only

 something that occurred before the contract - consideration must move from the contract
(eg a gift received in January cannot be consideration for a contract entered into in
October)

 anything illegal

Intention

Not all agreements between parties are contracts. It must be clear that the parties intended to
enter into a legally binding contract.

In the case of business agreements, the general assumption is that the parties intended to enter
into a contract.

In social situations, there is generally no intention for agreements to become legally binding
contracts (eg friends deciding to meet at a specific time would not constitute a valid contract).

It is up to the person who wants the agreement to be a contract to prove that the parties actually
intended to enter into a legally binding contract.

Ending a contract
You can end a contract for convenience or for cause - read our guide on Ending a contract for
further information.

Contracts are valuable when they are used correctly. Keep these elements in mind to ensure that
your agreements are always protected.

Entering into a contract with a minor


The law presumes that some people do not have the power to make contracts. These people are:

 children under 7 years

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 people who are mentally insane

 people who are under the influence of drugs or alcohol

A minor between 7 and 18 years of age can therefore enter into a contract. There is a
presumption, however, that they do not understand the implications of entering into the contract.
This means that the minor remains protected, to the disadvantage of the other party. The minor is
able to cancel a contract at any time before reaching the age of 18, and for a reasonable period
afterwards without valid reason as the contract is 'voidable'.

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