A contract is a legally binding agreement between two parties that legally doesnt necessary have to be in writing, many of these contracts are known as simple or parol contracts.

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Law, Business and Society

1a)

 A contract is a legally binding agreement between two parties that legally doesn’t necessary have to be in writing, many of these contracts are known as simple or parol contracts. For a contract to initially come into being a few features are required to exist, these features are:

  1. An offer
  2. An acceptance
  3. Consideration
  4. Intention to create legal relations

As stated, a contract doesn’t have to be in writing to actually be legally binding as this is the case with the majority of contracts. On the other hand when difficult contracts are being established, clients generally prefer to have the contents of contract in writing instead of settling the terms by word of mouth.

Some contracts are obligated to be in writing, contracts concerning the sale of land or a client wanting to obtain credit or a client wanting to be the guarantee of another party’s debt, are required to be in writing.

The statement of terms between two party’s prepared to do business with one another (these party’s being an offeror and an offeree) are defined as the offer.

An offer or business agreement can either be:

-Bilateral: when a promise is made in return for another promise

-Unilateral: when a promise is made and return a specific act is completed

(Adams, A (2010). Law for business students. 6th ed. London: Pitman Publishing imprint. 64-65.)

  1. (case of Lefkowitz v. Great Minneapolis Surplus Store, 251 Minn. 188, 86 N.W.2d 689 (1957))

The case of Lefkowitz concerns “The Great Minneapolis Surplus store” publishing advertisements in a newspaper for their sale. In the advertisement there was stated that certain items such as coats and scarves would be sold for a mere 1 dollar for the first person who comes to the store. As a result of the advertisement Lefkowitz went to the store and was the first customer to present himself and offer the single dollar price per item of the advertisement. The owner of the store (the defendant) then refused to sell Lefkowitz the items due to the fact that the advertisement (the offer) was only for women.

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Lefkowitz decided to take it to court and ultimately the court ruled in favor of Lefkowitz , and there was a unilateral business agreement, as there were clearly stated terms, intention to do business and intention communicated.

“the offer was clear, definite, explicit, and left nothing open to negotiation. While the offeror has the right to modify his offer prior to acceptance, he cannot change his offer after acceptance.”

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      ii)

The main difficulty the court had in this case was determining was whether or not the advertisement was actually an offer, but eventually the court ruled that when a advertisement concerning goods is clearly stated and definite and invites a specific action and doesn’t leave anything open for negotiation it is indeed considered an offer. The court ruled out any other key elements missing in the formation of the contract.

1b)

As state an offer can be bilateral as well as unilateral, a bilateral offer being an offer consisting of a mutual promise being made between two parties and an unilateral offer a promise made in return of completion of a specified act.

For an offer to be legally binding it must:

  1. Be clearly stated
  2. An intention to do business
  3. A communication of that intention

These requirements must exist to make an offer valid. Should an offer not be accepted, it can ended in a variety of ways these being:

  1. Death, when the person making the offer (the offeror) dies, the actual offer dies with him.
  2. Refusal and counter offer: If the offer being made is turned down, it ceases to exist also when a counter offer is made the previous offer disappears.
  3. Lapse of time: If within a specified time limit/reasonable amount of time the offer is not accepted it ceases to exist
  4. Revocation: any offeror has the option to withdraw his or her offer if they change their mind (up until the moment of acceptance.)

Not only an offer but also an acceptance is bound by certain rules, once the offeree agrees to bound by the conditions of the offer, the acceptance (to be legally binding) has to fulfill these rules:

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  1. it must be a ‘mirror image’ of the offer: The offeree has to agree with all the terms within the offer, and thus cannot introduce new terms.
  2. Acceptance must be firm:  Due to the fact that a conditional acceptance isn’t binding the acceptance has to be clear.
  3. Acceptance must be communicated to the offeror: A variety of rules are related to communication.
  4. (Adams, A (2010). Law for business students. 6th ed. London: Pitman Publishing imprint. 72-74.)

  1. (Chwee Kin Keong and Others v Digilandmall.com Pte Ltd [2005] 1 SLR ...

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