Q1: What are the essentials of a "Valid Contract" Discuss?
Extracts from this document...
Q1: What are the essentials of a "Valid Contract" Discuss? A contract is made up of a promise of one person to do a certain thing in exchange for a promise from another person to do another thing. Contract law exists to make sure that people keep their promises and that if they do not, the law will enforce it upon them. Contract law is based on several Latin legal principles, the most important of which is consensus ad idem, which means a meeting of the minds between the parties or, in other words, a clear understanding, offering and acceptance of each person's contribution. Lawyers say that it is from the moment of " consensus ad idem" that a contract is formed and may be enforced by the courts. So a contract requires an agreement between the parties. But not all agreements are contracts. The general law of contract in Pakistan is contained in the Contract Act 1872. English decision's (where relevant) are also cited in the courts. The Act defines "contract" as an agreement enforceable by law. The essentials of a (valid) contract are: 1. intention to create a contract; 2. offer and acceptance; 3. consideration; 4. capacity to enter into a contract; 5. free consent of the parties; 6. lawful object of the agreement; Writing is not essential for the validity of a contract, except where a specific statutory provision requires writing. An arbitration clause must be in writing. 1. Intention to create a contract ????????????????????????????? A definite intention to be bound is highlighted. ...read more.
(b) A statement which invites the other party to make an offer (e.g., a notice inviting tenders). (c) Statement of lowest price. It is regarded as an invitation to make offers. (d) Display of goods in a ship with price tags. (It is merely an invitation to make an offer, so that the trader may not accept the offer, if the price is incorrectly marked. Termination of offer Some parties clearly indicate that their statements or documents do not constitute offers, e.g., estate agents."These particulars do not form, nor constitute any part of an offer, or a contract, for sale". Until an offer is accepted, it creates no legal rights and it may be terminated at any time in a variety of ways. Quality of acceptance Acceptance of an offer must be absolute and must correspond with the terms of the offer. This rule, a key constituent of the basic premise, does not always accord with the realities of complex business contract negotiations today. Such negotiations may indeed proceed through a series of proposals, counter-proposals, withdrawals, variations and qualifications, before agreement (or otherwise) is reached. When parties carry on lengthy negotiations, it may be hard to say exactly when an offer has been made and acceptance. A conditional offer, if accepted, must be accepted along with all the conditions. However, in regard to international agreements governed by the U.N. Convention on contracts for international sale of goods, there is a slight qualifications, in as much as, article 19 of the Vienna Convention provides that non material variations between offer and acceptance do not make a difference. ...read more.
Remedies for breach of contract The principal remedies for breach of contract are: (a) damages; (b) specific performance of the contract; and (c) injunction. When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, being loss or damages which naturally arose in the usual course of things from such breach or which the parties knew, when they made the contract, to be likely to result from the breach of it. Such compensation is not to be given for any remote and indirect loss of damage sustained by reason of the breach. The same principle applies for determining damages for breach of an obligation arising from quasi-contract. In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account. This is referred to, as the duty to mitigate. Illustration A stipulation for increased interest from the date of default may be regarded as a stipulation by "way of penalty", if the amount is excessive. The court is empowered to reduce it to an amount reasonable in the circumstances. Specific performance and injunctions In certain special cases dealt with in the Specific Relief Act, the court may direct against the party in default "specific performance" of the contract, that is to say, the party may be directed to perform the very obligation which he has undertaken, by the contract. This relief is awarded only in exceptional cases. That Act also deals with permanent injunctions. Temporary injunctions are governed by the provisions of order of the Code of Civil Procedure, 1908. ...read more.
This student written piece of work is one of many that can be found in our University Degree Contract Law section.
Found what you're looking for?
- Start learning 29% faster today
- 150,000+ documents available
- Just £6.99 a month
- Join over 1.2 million students every month
- Accelerate your learning by 29%
- Unlimited access from just £6.99 per month