Business Notes: Law – Contracts

What is a Contract?

A contract is a legally binding agreement between 2 people (it does not need to be written!)
Written contracts are mainly for proof (such as a receipt in shops are evidence for the purchase which you have just made) or to look back on what was agreed.

Contracts Gives Parties RIGHTS & OBLIGATIONS

Some contracts must be in writing because statute requires it, for example:

Finance (credit) – inc. phone contract
Employment – – need to know to be able to refer to it

Four ‘Ingredients’ Must Be Present in Order for a Contract to Exist

1. Offer
2. Acceptance (an agreement, not yet a contract)
3. Consideration
4. Intention to create legal relations

All four of the above must be present in order for a contract to exist. If one is missing then there is no contract between the parties.

Formation of a Contract

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