Contract Law - Free Essay Example

Not all agreements are necessarily contracts since a contract is essentially an agreement enforceable by law. At the same time, an agreement that is enforceable by law does not also mean that it is a contract. As such, all contracts are agreements, but not all agreements are contracts. For an agreement to be considered a contract, it must contain these six elements, namely an offer, the acceptance, capacity of the parties to contract, consideration, the object of the contract, and the intent of the parties to contract (Elliott & Quinn, 2007). These are essential elements that guarantee that a contract is legal under the law provided.

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An offer is the conscious and clear expression of an overt action that usually signifies the conception of a contract. Usually, an offer can take the form of a written or oral dimension provided that there is no requirement to have the offer presented in a written form according to the law. An offer refers to that which is offered to another with the promise that the person offered the contract promises to act in kind (Elliott & Quinn, 2007). A contract offer cannot be unclear and ambiguous; it needs to define the object being offered as well as the conditions and the terms by which a person is expected to act. The terms and conditions of a contract need to be specific and certain in such a way that the parties will be empowered to act appropriately. Another element of a contract is the acceptance of the offer by a party, thus, creating a contract (Elliott & Quinn, 2007). As a general rule, acceptance of a contract cannot be withdrawn. At the same time, the acceptance cannot be used to vary the terms presented in the offer. Likewise, it cannot alter or modify the offer, and any action resulting in an alteration or modification is referred to as a counteroffer (Lando, 2007). As a general rule of law, there is no conditional acceptance of the law because such a move would be seen as a rejection of the offer. On the other hand, should the offerer accept a counteroffer, he is bound by the conditions outlined by the offeree (Elliott & Quinn, 2007).

Consideration is an absolutely vital component of a contract and may include money, right, benefit or interest. Consideration may also be a loss, detriment or responsibility given up to another entity. As a rule of law, the concerned parties in the contract must expressly agree upon the consideration. Alternatively, consideration should be expressly implied by a contracts terms and conditions (Elliott & Quinn, 2007). Any accidental or potential detriment or benefit alone cannot be considered to be a valid consideration. Consideration should be explicit as well as sufficient to hold out the terms of a contract, although it is not a must for consideration to be of a particular monetary value (Elliott & Quinn, 2007). A mutual promise can be counted to be a satisfactory consideration as long as they are binding. It should be noted, however, that a promise to act in a contract does not amount to a sufficient consideration for a contract. It is the work of the courts to determine such an application (Lando, 2007).

The capacity of the parties to contract is another crucial aspect of a contract. The general presumption in law holds that all people possess the ability to contract. One may try to opt out of a contractual obligation by pleading that he does not have the capacity to contract by proving that he is a minor, incompetent, drunk or drugged (Lando, 2007). It is a difficult burden of proof to surmount due to the laws presumption that all people possess the ability to contract (Elliott & Quinn, 2007). When it comes to the intent of the parties to contract, it refers to the meeting of the minds or rather, a mutual assent. As a general practice by the courts, a contract cannot be considered valid unless all the parties involved were with the intention of entering into it. Fraud and some forms of mistakes can make a contract void, especially when they constitute one party being misled by another (Lando, 2007). Negotiations to arrive at an agreement do not constitute an offer and acceptance. The object of the contract needs to be legal and in line with public policy. It is the only way that a contract can become enforceable. In some states, there is legislation that makes contracts in restraint of trade, monopolies or price-fixing illicit (Elliott & Quinn, 2007).

In Hyde v. Wrench 1840, Wrench, the defendant, offered Hyde, the plaintiff, his estate for 1200 pounds. However, Hyde rejected the offer, which prompted Wrench to return with another offer in the amount of 1000 pounds. Hyde brought a counter offer of 950 pounds (Lawnix Website, 2016). Wrench disagreed to the offer, which prompted Hyde to opt for the earlier offer. On Wrenchs refusal, Hyde sued for breach of contract with the issue being that, does a counteroffer make an original offer open? The ruling held that a counteroffer negates the original offer (Lawnix Website, 2016). As such, since the offer was not accepted, it cannot be revived at a later date. A contractual concern would relate to the consideration in light of the responsibilities that both parties have to carry in effecting the contract.

References

Elliott, C. & Quinn, F. (2007). Contract law. Harlow: Pearson Longman.

Lando, O. (2007). Culture and Contract Laws. European Review of Contract Law, 3(1), 1-20. http://dx.doi.org/10.1515/ercl.2007.001

Lawnix Website. (2016). Hyde v. Wrench Case Brief Summary. Lawnix.com. Retrieved 19 August 2016, from http://www.lawnix.com/cases/hyde-wrench.html