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The Basic Elements of a Contract Are Mutual Assent Consideration, Capacity and Legalit

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Using appropriate case la identify whether all the essential elements of a contract are in place between PRIMARY DIRECT and PRESSES Pacesetters and explain the importance of the elements. Introduction: A contract is an agreement creating obligations enforceable by law. The basic elements of a contract are mutual assent consideration, capacity and legality. In some states, the element of consideration can be satisfied by a valid substitute. Possible remedies. Breach of contract includes general damages; consequential damages reliance damage and specific performance.

Poole, 2014, Pl 5) In other words Contracts are promises that the law will enforce. The law provides remedies if a promise is breached or recognizes the performance of a promise as a duty. Contracts arise when a duty does or may come into existence, because f a promise made by one of the parties. To be legally binding as a contract, a promise must be exchanged for adequate consideration. Adequate consideration is a benefit or detriment, which a party receives which reasonably and fairly induces them to make the promise/contract.

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For example, promises that are purely gifts are not considered enforceable because the personal satisfaction the grantor of the promise may receive from the act of giving is normally not considered adequate consideration. Certain promises that are not considered contracts may, in limited circumstances, be enforced if one party has relied to his detriment on the assurances of the other party. Off r An offer is a conditional promise submitted by an offer(buyer or seller) to another offered, which is the one who accepts the offer and after accepting the offer becomes legally enforceable(Poole, 2014, pop).

An offer its also know as a proposition made by one party to another on terms that are fixed or capable of being fixed with the intention that it will be binding that party when accepted by the other party or individual. An example of offer it’s a car agency retailer will offer a car saying a BMW, for 30,000 pounds meaning that the car will be sold or the amount mentioned above in case the individual accepts the offer that its being made by the agent.

Identify the offer in the scenario According to the case study it must be identified if there was an offer made between PRIMARY DIRECT and PRESSES pacesetters in the first place. In relation to the scenario PRIMARY DIRECT issued a tender which in legal words with in a contract it means that a tender is an estimate given in response to a request. The request for tenders it is known as an invitation to treat, which doesn’t mean that it’s an offer.

Invitation to treat its an expression to willingness to negotiate, n individual or a company like in this case PRIMARY DIRECT which issued the tender does not intend to be bound as soon as it is accepted by the other party invitation to treat can be seen in the case of (Spencer v Harding)(1870). After PRIMARY being in communication with PRESSES pacesetters and being supplied with numerous of quotations agreeing on a final quotation, quotation number 222, quotation number 222 was sent to PRIMARY DIRECT, There fore its known that quotation number 222 was the offer made by PRESSES pacesetters to PRIMARY DIRECT Rules on offer 1.

The offer must be communicated to the offered, according to the case law f (Williams v Cowardice)(18833) B it is mentioned that an offer can’t be accepted if the offered doesn’t know anything about that offer, meaning in different words that the offered has to know about the offer that its being made. According to the scenario and applying this rule to this work, PRESSES pacesetters supplied number of quotations via email to PRIMARY DIRECT, adding quotation number 222 it is noticeable noticeable that the offer from the offer(PRESSES pacesetters)was communicated to the offered(Primary DIRECT) 2.

The offer must not be loose or vague it has to be specific and definitive and his is related to the case law of Gibson v Manchester City council In the case of PRIMARY DIRECT and PRESSES pacesetters it is mentioned in the scenario that: PRESSES supplied a final quotation number 222 to Primary which included a full description of the project, standard terms and conditions, timescales, pricing and payment schedules.

This means that the offer from PRESSES was not vague or loose it was specific and definite Conclusion It can be concluded that all the elements of a valid offer are in place saying that the offer from PRESSES pacesetters to PRIMARY DIRECT was valid. Acceptance Acceptance is a voluntary act (which may consist of words or conduct) by offered that shows assent (agreement) to the offer. The acceptance must unequivocal and must be communicated to the offer and most importantly the offer must be accepted by the offered, not by a third person. (Roger LeRoy Miller & William Eric Hallowed) (2014). Business Law. 126.

Acceptance can be written, verbally or via conduct of the party which it’s accepting the offer. An example of acceptance could be when an executives receives an offer to have a promotion he/she have the power to accept that promotion knowing he/she will have bigger susceptibilities and a higher salary as well. Identify acceptances within the scenario of PRIMARY DIRECT and PRESSES pacesetters According to the case study PRIMARY DIRECT replied to PRESSES pacesetters offer quoting the exact words from the case study, which are: ” we are generally happy with your final quotation number 222 subject to a few conditions.

PRIMARY DIRECT accepted the 1st term, which is the total price and the amount of money to be paid to PRESSES pacesetters from PRIMARY DIRECT its El. Mm, and also accepted the payment Schedule agreed. On the other hand PRIMARY DIRECT just accepted 1 of the 4 terms delivered by PRESSES pacesetters, which are: 1 . This is subject to a formal contract being agreed in the near future. 2. The contract is not effective until both parties have signed the formal contract. 3. We agree to reimburse all legitimate expenses if a formal contract cannot be agreed.

After PRIMARY DIRECT provided their own terms and conditions to PRESSES pacesetters this becomes a Counter offer. Counter offer it is when the original offer is rejected and no longer valid in the case study, PRIMARY DIRECT in legal terms rejected PRESSES pacesetters offer and there for implied a counter offer which it becomes the new offer with different terms according to (Hyde v Wrench) (1849) 49 ERE 132 by having a counter offer the original offer is destroyed and no longer allowed for the offered to accept it.

To this new offer provided by PRIMARY DIRECT a second counter offer from PRESSES pacesetters stating the following information that can be seen in the case study by saying: ‘”Should a formal contract not be agreed, we reserve the right to claim not only our legitimate expenses but also to claim a reasonable amount of the profit we would have made had the contract been finalized. ‘ Rules of acceptance 1. According to the case of (butler machine tools v ex-cell-corp.) (1979) lower 401 , acceptance must mirror the offer, and if its not mirrored there is no acceptance.

If the acceptance is does not matches the offer, leading to a counter offer this can take the situation in to a term called battle of the forms after having a counter offer from both parties the offered its completely free to accept it or rejected. This can be analyses with in the case study when PRIMARY DIRECT agreed on accepting quotation number 222, but is subject to PRIMARY DIRECT terms and conditions as it was mention in the past paragraph, leading to a battle f the forms between PRIMARY DIRECT and PRESSES pacesetters.

Battle of the forms is when both parties have a greed on material terms such as price, quantity and delivery dates but the standard terms are at variance for instance their might be an arbitration clause in one but not I the other or a difference in cancellation rights( Burton, 2010 business contract law, P 157) this situation which is the battle of the forms is when PRIMARY DIRECT accepts to buy the goods from PRESSES pacesetters on PRIMARY DIRECT terms, and its up to PRESSES pacesetters to accept this new offer from PRIMARY DIRECT. . After all the paradigm of the battle of the forms between PRIMARY DIRECT and PRESSES pacesetters, PRESSES responded to PRIMARY DIRECT offer with a counter offer email stating that they accept the main contents written by the other party but with a few changed stating that Should a formal contract not be agreed, we reserve the right to claim not only our legitimate expenses but also to claim a reasonable amount of the profit we would have made had the contract been finalized. After the email sent from PRESSES to the other party there was no response from PRIMARY DIRECT meaning that PRESSES was the one ho stated the last terms leaving PRESSES as the one who did the last shot and therefore wining the battle according to the case of (Dakota Interconnections Ltd v Manhole Ltd [2010] 1 Load’s Rep 357) 3. The last rule that its relevant in the case study according to the acceptance between these two parties is that the acceptance must be effectively communicated, whether it will be communicated, written, verbally or via conduct according to the case of (Broaden v Metropolitan Railway) (1877) 2 App Case 666.

PRIMARY DIRECT did an early payment which it means with in law entrant that PRIMARY DIRECT accepted PRESSES pacesetters offer via conduct and work commenced, there for it can be said that acceptance was effectively communicated due that PRIMARY DIRECT decided to accept it via conduct As conclusion with in acceptance it can be said that acceptance from PRIMARY DIRECT was communicated via conduct by making an early payment, as work commenced by PRESS pacesetters there for speaking legally it can be stated that acceptance has been identified and absolutely valid.

Consideration An act or forbearance of the one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable. (Pollock, Principles of Contract Law (13th De. ,) p. 133. Another definition of consideration by Lush J according to the case of (Currie v Miss) (1875) LORE 10 Ex 153, is: Consideration, in the sense of the law, may consist either in some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.

In other words consideration is the price paid for the promise. It is usually money but it can be “in kind”. Consideration must be in the present or the future; past consideration is not valid. Consideration must be sufficient, it must have some value but it does not have to be adequate – you can agree to pay too much or too little. Rules of consideration 1. – Consideration does not have to be adequate. Here is a case law example: Thomas v Thomas (1842) 2 CB 851 . Consideration must be of some value but it doesn’t have to be necessarily equivalent to the other party’s act or promise.

In the case of PRIMARY DIRECT and PRESSES pacesetters, as mentioned in the scenario, PRIMARY DIRECT responded to PRESSES pacesetters offer and said: The total price of El Mm and the payment schedule are agreed. ” Therefore the conclusion is that based on the agreement above, the amount of El . Mm is the consideration from PRIMARY DIRECT to PRESSES. 2. Consideration should be sufficient. It doesn’t have to be adequate but it must be sufficient. Sufficient consideration is what the law recognizes as being a valid consideration. Consideration cannot be intangible.

It has to be tangible and of some value otherwise its not consideration according to the case of White v Bluest (1853) 23 LLC Ex 36. In the case of PRIMARY DIRECT and PRESSES, the consideration is tangible ND of high value. In the scenario it says that “PRIMARY is happy with the amount El. Mm”. This indicates that the consideration is sufficient. 3. Consideration must move from the Promises. The person who wants to enforce the contract has to show that he or she provided the consideration. If someone other than the promises is going to provide the consideration, then the promises cannot enforce the contract.

Twaddle v Atkinson (1861) 1 B&S 393. In the case of PRIMARY DIRECT and PRESSES, it is mentioned in the scenario ” the work commenced and PRIMARY made early payments to PRESSES” So according to this statement, we now that the consideration is moving from PRIMARY (the promises) to PRESSES (the promissory). In the scenario between PRIMARY DIRECT and PRESSES pacesetters, we already established that PRIMARY agreed to pay El. Mm to PRESSES and in return PRESSES is going to provide new checkout systems and software for PRIMARY. This consideration seems to be in accordance with the rules of consideration.

The consideration is not in the past, it is adequate, it is sufficient and tangible and it is moving from the promises to promissory. Therefore we can conclude that there is a valid consideration in place. Intention to create legal relations Intention to create legal relations is an intention to enter a legal binding agreement or a contract. Intention to create legal relations is one of the necessary elements in formation of a contract, because it consists of readiness of a party to accept the legal sequences of having entered into an agreement.

An example of intention to create legal relations could be the following: if I have agreed to play football with my friend over the weekend, I only have a moral duty to value my agreement however if I don’t show up for the football match over the weekend, my friend cannot sue me because didn’t have a legal duty to go o the football match. The law separates social and domestic agreements and agreements made in commercial context. (Burton,201 0, p. 159) According to the case study intention to crate legal relations will be now identify in the following lines.

Rules of intention to create legal relations 1. According to the case of Edwards v Skyway 1964 LAIR 349-court appeal, it specifies that in commercial transactions there is a presumption that the parties intend to create legal relations between both party’s agreements. In relation to the case study of PRIMARY DIRECT and PRESSES pacesetters these two companies greed on having a commercial relationship through a commercial context, due to that element just mentioned it is known that the companies intended to create a legal relationship between them as it is highly commercial context, unless they rebut it.

Therefore the conclusion here is that the presumption by law is that there is intention to create legal relations between PRIMARY and PRESSES. The importance of these essential elements of the contract If one of the essential elements of the contract is not presented the contract would be in legal words (void ABA monition) coming from the Latin Word which in English it means invalid from the beginning, meaning that there was never a contract. In order to have a valid and legally binding contract all of the essential elements must be identified or present on a valid way with in the contract.

In relation to the case study which its between these two monster companies which are PRIMARY DIRECT and PRESSES pacesetters, in the scenario given which its been already analyses and pointed out that every each one of the elements mentioned above are valid. Therefore the contract between PRIMARY DIRECT and PRESSES pacesetters is legally binding and absolutely valid. Q. Explain and analyses the contents of the standard form business contracts and advise on the relative importance of express terms, implied terms and exclusion clauses in line with the PRIMARY Scenario.

What is standard form of contract? Standard form of contract are types of legally binding contracts where Only one part of the contract has the bargaining power and therefore they can influence the contract in any way they want. Standard Form Contracts, sometimes referred to as ‘boilerplate’ or adhesion contracts, constitute a category of contracts that are presented to a party for acceptance or rejection without any additional estimation. Gerri De Guest (2011). Contract Law and economics. 2nd De. 115.

However, on the other hand, the other side of the contract has absolutely no say in the terms and conditions or power to negotiate them, these types of contracts are also called “take it or leave it” and as it was mentioned above they are non- negotiable. A good example of standard form contracts could be the contracts that are sign with mobile network or Internet suppliers such as 02, sky, BET etc. In their contracts customers are not allowed or don’t have the right and power to negotiate their terms and conditions of their contract.

Customer service people or sales person offers you a contract and its up to the client to sign or agree to such contract and there is where the term take it or leave it takes place cause there is no other option but those. When it comes to standard form of contracts the party who wrote or elaborates the contract has the power to write it in their favor o in their advantage. Therefore the implications of such contract are known as well as competition law and this can lead or be seeing as unfairness, but, on the other hand there can be some benefits in standard form of contract as well.

Standard form of contract reduces the transaction costs and also in repeat contracts, standard form is more desirable as it reduces uncertainty and doubt about the meaning of such contract and terms. Express terms: The terms that are agreed between the two parties are called the express terms. These terms can be communicated either written or verbally. An express term is a term that can be found in the literal meaning of the parties’ words or other significant acts. All other terms of the contract are implied terms (Class) (2010).

P. 131. According to the scenario, an example of an express term with n the contract between PRIMARY and PRESSES: The total price of mm and the payment schedule are agreed. This is a great example of an express term since both parties have agreed upon it and it is a vital term of the contract. Without the consideration, the contract won’t be valid. When it comes to interpreting the terms of a contract in court; the court always gives priority to the express terms over the implied terms.

Implied terms: Refers to the practice of setting down default rules for contracts when terms that Contracting parties expressly choose run out, or setting down mandatory rules, which operate to override terms that the parties may have themselves chosen. The main objective of implied terms is frequently to supplement a contractual agreement in the interest of making the deal effective for the purpose of business, to achieve fairness between the parties.

These are terms that are read into the contract by the courts or statute on the basis of the nature of the agreement and the parties’ apparent intention or on the basis of law on certain types of contract. Any contract of sale will contain such terms as are implied by the Sale of Goods Act 1979. Implied terms can be divided in 3 different elements, which are the following ones: 1 . Implied by statute: When implied by statute, Parliament may well make certain terms compulsory. The examples are numerous.

For instance, the National minimum wage act 1998 provides that in any contract for work, the worker must be paid according to a minimum wage set by Parliament (E. 19 per hour for workers aged 21 or over as of October 2012). Another example is that under the unfair contract terms act 1977, provisions of the (sales of good acts 1979) such as that goods for sale must be of satisfactory quality, become compulsory n contracts with consumers, or can only be excluded when reasonable[l] in contracts among businesses. . Implied by court: When courts imply terms, the general rule is that they can be excluded by express provision in any agreement. 3. Implied by law: Terms implied “in law” are confined to particular categories of contract, particularly employment contracts or contracts between landlords and tenants, as necessary incidents of the relationship. For instance, in every employment contract, there is an implied term of mutual trust and confidence supporting the notion that workplace relations depend on partnership.

Analyzing PRIMARY case study and relating it to this question, in the case study it can be noticeable that these two companies, PRIMARY DIRECT and PRESSES pacesetters went through a process called due diligence, due diligence is an investigation of a business or person prior to signing a contract, or an act with a certain standard of care. It can be a legal obligation, but the term will more commonly apply to voluntary investigations (Poole, 2014,p. 46) This process will make PRIMARY feel more safe by making business with PRESSES pacesetters because it will ensure them that PRESSES pacesetter will provide a satisfactory laity in their computer system on the installation and services provided. Importance of express terms and implied terms Usually contractual disputes occur between the parties of a contract where the parties are not clear about their obligations under the contract.

The express terms and implied terms of the contract affect the obligations of the parties of the contract, therefore it is very important for the parties to know exactly what the terms are and what is expected of them according to those terms. The terms of the contract can be categorized as: express terms, implied terms and nominate terms. In case of a breach of contract, it can be determinate the effects and remedies that are available to the innocent party, by deciding which term of the contract has been breached.

If any parties to the contract, is in breach of any of the terms of the contract (express term or implied terms), then the courts will decide on the remedies for the breach according to the type of the term that was breached. This is the most significant reason why the parties to a contract should know their obligations under the contract and be aware of the consequences if they are in breach of any of those terms.

Exclusion Clauses Exclusion clauses are clauses, usually written down, that say that one party to the contract will not be responsible for certain happenings. Exclusion clauses also know as exemption and limitation clauses are certain types of contractual terms. The courts have governed different rules in interpreting these terms in order to be able to determine their effect on the contract. For example, if you join a gym, it is common for the contract to say that the gym owner will not be responsible if you are injured while exercising.

Cite this The Basic Elements of a Contract Are Mutual Assent Consideration, Capacity and Legalit

The Basic Elements of a Contract Are Mutual Assent Consideration, Capacity and Legalit. (2018, May 08). Retrieved from https://graduateway.com/the-basic-elements-of-a-contract-are-mutual-assent-consideration-capacity-and-legalit/

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