contract unit 30. preview definition definition requirements for a valid contract requirements for a...

CONTRACTCONTRACT

Unit 30Unit 30

PreviewPreview

DefinitionDefinition Requirements for a valid contractRequirements for a valid contract Breaking off contractual negotiationsBreaking off contractual negotiations Privity of contract (third party)Privity of contract (third party) Contents of a contract (terms)Contents of a contract (terms) Vitiating factorsVitiating factors Ending the contractEnding the contract Remedies for breach of contractRemedies for breach of contract Legal termsLegal terms

DefinitionDefinition

A legally binding agreement between A legally binding agreement between two or more persons which the two or more persons which the courts will enforcecourts will enforce

Generates rights and obligations that Generates rights and obligations that may be enforced by courtsmay be enforced by courts

Agreement arises as a result of offer Agreement arises as a result of offer and acceptanceand acceptance

Requirements for a valid Requirements for a valid contractcontract

1) parties must have legal capacity 1) parties must have legal capacity to enter contractsto enter contracts

2) one party must make a binding 2) one party must make a binding offer to the other, and the offer must offer to the other, and the offer must be accepted by the other partybe accepted by the other party

3) consideration3) consideration

Requirements for a valid Requirements for a valid contractcontract

4) Agreement must be genuine4) Agreement must be genuine 5) in some cases, the contract must 5) in some cases, the contract must

be made in a particular formbe made in a particular form 6) the object of the contract must not 6) the object of the contract must not

be disapproved by the lawbe disapproved by the law

OfferOffer

An indication of willingness to do or An indication of willingness to do or refrain from doing sth that is capable refrain from doing sth that is capable of being converted into a legally of being converted into a legally binding contractbinding contract

It is made by an offeror to an offeree It is made by an offeror to an offeree and is capable of acceptance only by and is capable of acceptance only by an offeree who knows of its existencean offeree who knows of its existence

OfferOffer

An offer is terminated when it has An offer is terminated when it has been revoked, or lapsed, or met with been revoked, or lapsed, or met with a counter-offera counter-offer

AcceptanceAcceptance

Agreement to the terms of an offer Agreement to the terms of an offer that, provided other requirements that, provided other requirements are fulfilled, converts the offer into a are fulfilled, converts the offer into a legally binding contractlegally binding contract


If the method by which acceptance is to If the method by which acceptance is to be signified is indicated by the offeror, be signified is indicated by the offeror, that method alone will be effectivethat method alone will be effective

If it is not, acceptance may be either If it is not, acceptance may be either express (by word of mouth or in writing) express (by word of mouth or in writing) or inferred by the offeree’s conduct, e.g. or inferred by the offeree’s conduct, e.g. if he receives goods and makes use of if he receives goods and makes use of themthem


Must involve some action on the part Must involve some action on the part of the offereeof the offeree

Validity of acceptanceValidity of acceptance

1) it must take place while the offer 1) it must take place while the offer is still in force;is still in force;

2) it must be on the same terms as 2) it must be on the same terms as the offerthe offer

3) it must be unconditional3) it must be unconditional 4) it must be communicated to the 4) it must be communicated to the

offerorofferor

Counter-offerCounter-offer

Acceptance: Only when all the terms of Acceptance: Only when all the terms of the offer are agreed tothe offer are agreed to

If you propose a change to the terms of If you propose a change to the terms of an original offer, you are making a new an original offer, you are making a new offer – this is called a counter-offeroffer – this is called a counter-offer

Counter-offer – a rejection of the Counter-offer – a rejection of the original offer; there can be no contract original offer; there can be no contract until the counter-offer is accepteduntil the counter-offer is accepted

Special casesSpecial cases

When the offer consists of a promise When the offer consists of a promise to confer a benefit on whoever may to confer a benefit on whoever may perform a specified act, the offeror perform a specified act, the offeror waives the requirement of waives the requirement of communicationcommunication

ExampleExample

If the offeror offers a reward for If the offeror offers a reward for information, a person able to supply information, a person able to supply the information is not expected to the information is not expected to accept the offer formallyaccept the offer formally

The act of giving the information The act of giving the information constitutes the acceptance, the constitutes the acceptance, the communication of the acceptance, communication of the acceptance, and the performance of the contractand the performance of the contract

Intention to create legal Intention to create legal relationsrelations

If it can be shown that it was not the If it can be shown that it was not the intenion of the parties to create a intenion of the parties to create a legally binding relationship, there is no legally binding relationship, there is no contractcontract

Presumption: if the agreement is with Presumption: if the agreement is with family or friends, the agreement was family or friends, the agreement was not intended to be binding; commercial not intended to be binding; commercial agreements – the other way roundagreements – the other way round

ConsiderationConsideration

An exchange of promises to perform An exchange of promises to perform acts in the futureacts in the future

An act, forbearance, or promise by An act, forbearance, or promise by one party that constitutes the priceone party that constitutes the price

PrinciplesPrinciples

1) a valuable consideration is required, 1) a valuable consideration is required, i.e. the act, forbearance, or promise i.e. the act, forbearance, or promise must have some economic valuemust have some economic value

2) consideration need not be adequate 2) consideration need not be adequate but it must be sufficient (it need not but it must be sufficient (it need not constitute a realistic price as long as it constitute a realistic price as long as it has some economic value)has some economic value)

PrinciplesPrinciples

3) consideration must move from the 3) consideration must move from the promisepromise

4) consideration must not be past4) consideration must not be past

Consideration: exampleConsideration: example

A promises to sell a car to party BA promises to sell a car to party B B promises to pay $ 5.000 to A for the B promises to pay $ 5.000 to A for the

carcar Therefore:Therefore: A’s consideration is the promise to A’s consideration is the promise to

transfer the car to Btransfer the car to B B’s consideration is the promise to pay B’s consideration is the promise to pay

$5.000 to A for the car$5.000 to A for the car

Legal capacityLegal capacity

Adults have capacity, but not if they Adults have capacity, but not if they are of unsound mindare of unsound mind

Breaking off contractual Breaking off contractual negotiationsnegotiations

In legal systems where the doctrine In legal systems where the doctrine of good faith is recognised, breaking of good faith is recognised, breaking off contractual negotiations may give off contractual negotiations may give rise to legal consequencesrise to legal consequences

No duty to negotiate in good faith in No duty to negotiate in good faith in English law; no liability for pulling out English law; no liability for pulling out of negotiations at any stage or for of negotiations at any stage or for whatever reasonwhatever reason

Privity of contractPrivity of contract

You get the rights or have to fulfill You get the rights or have to fulfill the obligations of a contract only if the obligations of a contract only if you are a party to the contractyou are a party to the contract

If you are not a party, you can If you are not a party, you can neither sue nor be sued because of neither sue nor be sued because of the contractthe contract

Exception: third partyException: third party

Example: you have entered into a contract Example: you have entered into a contract with an insurance company; the aim – that with an insurance company; the aim – that your partner can benefit from the contract; your partner can benefit from the contract; it would be pointless if the company later it would be pointless if the company later refused to pay anything to your partner refused to pay anything to your partner because she was not a party to the because she was not a party to the contractcontract

English law allowes a third party who is to English law allowes a third party who is to benefit from the contract to enforce itbenefit from the contract to enforce it

Contents of the contractContents of the contract

Express termsExpress terms Implied termsImplied terms ConditionsConditions WarrantiesWarranties Exclusion termsExclusion terms

TermsTerms

Conditions or duties which have to be Conditions or duties which have to be carried out as part of a contract, carried out as part of a contract, arrangemens which have to be made arrangemens which have to be made before a contract is validbefore a contract is valid

Express termsExpress terms

Terms that the parties have Terms that the parties have specifically agreed to, being terms specifically agreed to, being terms the parties either said or wrotethe parties either said or wrote

Implied termsImplied terms

Example: you buy a boat. The first day Example: you buy a boat. The first day you go sailing the boat sinks. You you go sailing the boat sinks. You complain to the seller, he says the complain to the seller, he says the contract did not promise that the boat contract did not promise that the boat would floatwould float

One of the terms implied into a contract One of the terms implied into a contract of sale –that goods are of satisfactory of sale –that goods are of satisfactory quality and are fit for their purposequality and are fit for their purpose

Terms of a contractTerms of a contract

Term: a promise that is part of the Term: a promise that is part of the contractcontract

Terms of a contract:Terms of a contract: 1) conditions1) conditions 2) warranties2) warranties

ConditionCondition

A fundamental termA fundamental term If a party does not carry it out, you If a party does not carry it out, you

not only have the right to claim not only have the right to claim damages, but also to treat the damages, but also to treat the contract as terminatedcontract as terminated

WarrantyWarranty

A term of contract of lesser A term of contract of lesser importanceimportance

Does not deal with the main purpose Does not deal with the main purpose of the contractof the contract

If you have not carried out your If you have not carried out your obligations under a warranty, the obligations under a warranty, the other party has the right to sue you other party has the right to sue you for damages, but not to terminate for damages, but not to terminate the contractthe contract

Exclusion clausesExclusion clauses

The purpose: to exclude all liability for The purpose: to exclude all liability for failing to carry out the contract, either at failing to carry out the contract, either at all or not properly; open to abuseall or not properly; open to abuse

In order to prevent parties relying on In order to prevent parties relying on unfair contract terms, there are strict legal unfair contract terms, there are strict legal rules about the use of exclusion clausesrules about the use of exclusion clauses

The law protects consumers in particular The law protects consumers in particular against the wrongful use of exclusion against the wrongful use of exclusion clauses by businessesclauses by businesses

Ending the contractEnding the contract

1) a contract can be set aside (cancelled) 1) a contract can be set aside (cancelled) if it later appears there was sth wrong if it later appears there was sth wrong (misrepresentation, duress, mistake, (misrepresentation, duress, mistake, undue influence)undue influence)

2) a contract can be discharged where the 2) a contract can be discharged where the contract is valid, but comes to an end contract is valid, but comes to an end because it has been carried out,the parties because it has been carried out,the parties agree to end it, or there is a serious agree to end it, or there is a serious breach of contractbreach of contract

ContractContract

ValidValid VoidVoid voidablevoidable

ContractsContracts

Void contract – one that was never Void contract – one that was never legally validlegally valid

Voidable c. – can have legal effect Voidable c. – can have legal effect but could be made void if you want but could be made void if you want to rescind it (=annul)to rescind it (=annul)

Valid c. – legally enforceableValid c. – legally enforceable

Reasons to have a contract set Reasons to have a contract set aside: vitiating factorsaside: vitiating factors

MisrepresentaionMisrepresentaion Duress and undue influenceDuress and undue influence MistakeMistake

MisrepresentationMisrepresentation

A representation – a statement that was A representation – a statement that was made to encourage you to enter into a made to encourage you to enter into a contract, but it does not itself become part contract, but it does not itself become part of the contractof the contract

Misrepresentation (false representation) – Misrepresentation (false representation) – you cannot bring an action for breach of you cannot bring an action for breach of contract, but you can bring special acton contract, but you can bring special acton for a misrepresentation if you would not for a misrepresentation if you would not have otherwise entered into the contracthave otherwise entered into the contract

Remedies for Remedies for misrepresentationmisrepresentation

Misrepresentation makes the contract Misrepresentation makes the contract voidablevoidable

Recission: if you rescind the contract, the Recission: if you rescind the contract, the parties are put back in the position they parties are put back in the position they were in before the contract was entered were in before the contract was entered into. It is as if the contract never existedinto. It is as if the contract never existed

Damages: you can sue for financial Damages: you can sue for financial compensation if you have suffered any compensation if you have suffered any losseslosses

Duress and undue influenceDuress and undue influence

Duress: either actual violence or the Duress: either actual violence or the threat of violence was used to make threat of violence was used to make the other party enter into the the other party enter into the contract (“sign this contract or I’ll contract (“sign this contract or I’ll shoot you!”)shoot you!”)

Undue influence: improper pressure Undue influence: improper pressure other than violence (e.g. blackmail)other than violence (e.g. blackmail)

MistakeMistake

If absolutely fundamental, as it gets If absolutely fundamental, as it gets to the very heart of the transaction, to the very heart of the transaction, the contract will be considered void the contract will be considered void from the outsetfrom the outset

Discharge of contractual Discharge of contractual obligationsobligations

Discharge: parties are free of their Discharge: parties are free of their mutual obligationsmutual obligations

Termination of a contractTermination of a contract

PerformancePerformance Express agreementExpress agreement BreachBreach Doctrine of frustrationDoctrine of frustration

Discharge by performanceDischarge by performance

Only after you have carried out Only after you have carried out everything you promised to do in the everything you promised to do in the contract, exactly in the way you contract, exactly in the way you agreed to do it, your contractual agreed to do it, your contractual obligations will be dischargedobligations will be discharged

Discharge by agreementDischarge by agreement

Parties may agree that the contract Parties may agree that the contract should end automaticaly if some should end automaticaly if some event occurs or after a fixed period event occurs or after a fixed period of timeof time

Discharge by breachDischarge by breach

A party has made it clear that he will A party has made it clear that he will not carry out the contract, ornot carry out the contract, or

The party has not performed his The party has not performed his obligations properlyobligations properly

ConsequencesConsequences

Some breaches give you the right to Some breaches give you the right to sue for damages, but not the right to sue for damages, but not the right to terminate the contractterminate the contract

Has there been fundamental breach Has there been fundamental breach or not?or not?

Condition or warranty?Condition or warranty?

ExampleExample

In the contract it states that you must In the contract it states that you must deliver 10,000 tonnes of tomatoes on 23 deliver 10,000 tonnes of tomatoes on 23 May. You deliver tomatoes two days May. You deliver tomatoes two days later, on 25 May.later, on 25 May.

If the date of delivery was a condition, If the date of delivery was a condition, the other party has the right not only to the other party has the right not only to claim damages, but also to end the claim damages, but also to end the contract,i.e. he can refuse to take contract,i.e. he can refuse to take delivery.delivery.

ExampleExample

If the delivery date is a warranty, he If the delivery date is a warranty, he does not have the right to refuse the does not have the right to refuse the tomatoes, only to sue you for any tomatoes, only to sue you for any loss he might have suffered because loss he might have suffered because you delivered two days lateyou delivered two days late

Common law vs. Civil lawCommon law vs. Civil law

At common law, contractual liability At common law, contractual liability for breach is strict and the motive for for breach is strict and the motive for that breach is irrelevantthat breach is irrelevant

In civil law systems this may seem a In civil law systems this may seem a very harsh approachvery harsh approach

Discharge by frustrationDischarge by frustration

Example: you hire a room in a pub Example: you hire a room in a pub for your band to put on a show. for your band to put on a show. Before the date for the show, the pub Before the date for the show, the pub gets burned down. The fire is not gets burned down. The fire is not your fault, nor the fault of the owner your fault, nor the fault of the owner of the pub. The fire has made it of the pub. The fire has made it impossible to carry out the contract: impossible to carry out the contract: discharge by frustrationdischarge by frustration

Force majeureForce majeure

It is usual for commercial contracts It is usual for commercial contracts to include a force majeure clause: a to include a force majeure clause: a list of events considered to be list of events considered to be outside the control of the parties, outside the control of the parties, e.g. labour disputes, war, riot, e.g. labour disputes, war, riot, accident, fire, flood, etc.accident, fire, flood, etc.

Remedies for breachRemedies for breach

Damages: the aim is to put the claimant in Damages: the aim is to put the claimant in the position he would have been in if the the position he would have been in if the contract had been performed properlycontract had been performed properly

Specific performance: an order to make a Specific performance: an order to make a party perform his obligations under the party perform his obligations under the contractcontract

Injunction: a court order to stop someone Injunction: a court order to stop someone breaching a term of the contractbreaching a term of the contract

Suspension of performanceSuspension of performance

Suspension of performanceSuspension of performance

In civil law systems: if the other party In civil law systems: if the other party is in breach, you can stop carrying out is in breach, you can stop carrying out your obligations under the contractyour obligations under the contract

In common law: there is no general In common law: there is no general principle allowing for suspension of principle allowing for suspension of performance if the other party is in performance if the other party is in breach; suspension of performance – breach; suspension of performance – considered to be breach of contractconsidered to be breach of contract

Legal termsLegal terms

Unconditional acceptance of all the Unconditional acceptance of all the terms of an offerterms of an offer

AcceptanceAcceptance Refusal or failure by a party to a Refusal or failure by a party to a

contract to perform an obligation contract to perform an obligation imposed under the contractimposed under the contract

Breach of contractBreach of contract


Ability of a natural or legal person to Ability of a natural or legal person to enter into a contractenter into a contract

CapacityCapacity A fundamental term of the contract. If A fundamental term of the contract. If

it is breached, the innocent party may it is breached, the innocent party may not only claim damages, but may also not only claim damages, but may also opt to treat the contract as endedopt to treat the contract as ended

ConditionCondition


A contract must be a bargain. Each A contract must be a bargain. Each party gives value to the other by party gives value to the other by exchanging promises (or by a exchanging promises (or by a promise given in exchange for an promise given in exchange for an act). This exchange of value isact). This exchange of value is

ConsiderationConsideration Legally enforceable agreementLegally enforceable agreement ContractContract


If not all the terms of an offer have If not all the terms of an offer have been accepted, then there is no been accepted, then there is no acceptance of the offer, but a…This acceptance of the offer, but a…This is in effect a new offer, which now is in effect a new offer, which now has to be accepted by the other has to be accepted by the other partyparty

Counter offerCounter offer


In contract law, financial compensation In contract law, financial compensation that shuld put the claimant in the position that shuld put the claimant in the position he would have been if the contract had he would have been if the contract had been performed properlybeen performed properly

DamagesDamages Release from the obligations under a Release from the obligations under a

contract. D…may be by performance, contract. D…may be by performance, agreement, breach or frustrationagreement, breach or frustration

DischargeDischarge


Both parties agree to end the contractBoth parties agree to end the contract Discharge by agreementDischarge by agreement A contract may be discharged by A contract may be discharged by

___where the party in default has ___where the party in default has refused to perform, or where the refused to perform, or where the performance is so defective that there performance is so defective that there has been fundamental___has been fundamental___

Discharge by breachDischarge by breach


Parties are excused from the Parties are excused from the contract if, through no fault of either contract if, through no fault of either party, after the formation of the party, after the formation of the contract it becomes impossible to contract it becomes impossible to carry out the contract or the contract carry out the contract or the contract has become commercially pointlesshas become commercially pointless

Discharge by frustrationDischarge by frustration


The obligations under the contract The obligations under the contract has been carried out fully and exactlyhas been carried out fully and exactly

Discharge by performanceDischarge by performance Violence or threats of violence in Violence or threats of violence in

order to make someone enter into a order to make someone enter into a contractcontract

duressduress


Term in a contract to exclude the Term in a contract to exclude the liability of a party for contractual liability of a party for contractual failure. That failure could be in the failure. That failure could be in the form of breach of contract, form of breach of contract, misrepresentation or negligencemisrepresentation or negligence

Exclusion clauseExclusion clause Terms explicitly stated by the parties, Terms explicitly stated by the parties,

either oral or writteneither oral or written Express termsExpress terms


Most contracts include a f__ m___clause. Most contracts include a f__ m___clause. This lists events considered to be outside This lists events considered to be outside the control of the parties and for which the the control of the parties and for which the parties cannot be held responsible.parties cannot be held responsible.

Force majeureForce majeure A term is f:__ if it goes to the root of the A term is f:__ if it goes to the root of the

contract. If it is breached, the breach is contract. If it is breached, the breach is referred to as ____referred to as ____

Fundamental breachFundamental breach


Terms that can be read into the contract, Terms that can be read into the contract, whether by custom, statute or by the courtswhether by custom, statute or by the courts

Implied termsImplied terms A court order to stop a clause in the contract A court order to stop a clause in the contract

from being broken. It is a discretionary from being broken. It is a discretionary remedy and will not be ordered if damages remedy and will not be ordered if damages are a sufficient remedyare a sufficient remedy

injunctioninjunction


Where the representation is a false Where the representation is a false statement, it is called:____. M. can be statement, it is called:____. M. can be fraudulent, negligent or innocent.fraudulent, negligent or innocent.

MisrepresentationMisrepresentation A contract only confers rights and A contract only confers rights and

obligations on the parties to the contract. obligations on the parties to the contract. There are exceptions to this rule, both in There are exceptions to this rule, both in statute law and common law.statute law and common law.

Privity of contractPrivity of contract


A statement that encourages a party A statement that encourages a party to enter into the contract, but does to enter into the contract, but does not itself form a part of that contractnot itself form a part of that contract

RepresentationRepresentation Improper pressure other than violence Improper pressure other than violence

to make someone enter into a to make someone enter into a contractcontract

Undue influenceUndue influence


A defect that was present in th A defect that was present in th agreement at the time the contract agreement at the time the contract was made. The defect is sufficiently was made. The defect is sufficiently serious to have the contract set serious to have the contract set aside. V___ factors include aside. V___ factors include misrepresentation, mistake, duress misrepresentation, mistake, duress and undue influenceand undue influence

Vitiating factorVitiating factor

QuestionsQuestions

1. For the formation of a contract, 1. For the formation of a contract, consideration is one of the three consideration is one of the three requirements to make an agreement into requirements to make an agreement into a contract. What are the other two a contract. What are the other two requirements?requirements?

2. What is the doctrine of privity of 2. What is the doctrine of privity of contract?contract?

3. What is the difference between an 3. What is the difference between an express tem and an implied term?express tem and an implied term?

QuestionsQuestions

4. In English law, contractual terms 4. In English law, contractual terms are classified according to their are classified according to their importance: a term may be of importance: a term may be of fundamental importance or it may be fundamental importance or it may be only a minor term. Name these two only a minor term. Name these two categories of terms.categories of terms.

5. What is the purpose of an 5. What is the purpose of an exclusion clause in a contract?exclusion clause in a contract?

QuestionsQuestions

6. What is misrepresentation?6. What is misrepresentation? 7. What is the difference between 7. What is the difference between

discharge by frustration and discharge by frustration and discharge by breach?discharge by breach?

Contract law case Contract law case discussiondiscussion

Mr Jones is a second-hand car dealer. Miss Smith Mr Jones is a second-hand car dealer. Miss Smith wants a second-hand car, but tells Mr Jones that wants a second-hand car, but tells Mr Jones that she is only interested in buying a car which has she is only interested in buying a car which has done less than 10,000 miles. He ofers Miss Smith done less than 10,000 miles. He ofers Miss Smith a 1998 Ford Escort for a reasonable price. During a 1998 Ford Escort for a reasonable price. During the trial run, Miss Smith tells him she likes the the trial run, Miss Smith tells him she likes the car, the price is acceptable, but she repeats that car, the price is acceptable, but she repeats that she only wants the car if it has done less than she only wants the car if it has done less than 10,000 miles. Mr Jones says: ‘Of course it has not 10,000 miles. Mr Jones says: ‘Of course it has not done more than 10,000 miles. Look at the done more than 10,000 miles. Look at the milometer!” The milometer shows 7,000 miles.milometer!” The milometer shows 7,000 miles.

Contract law case Contract law case discussiondiscussion

However, what Mr Jones said was not However, what Mr Jones said was not true. The milometer has been true. The milometer has been tampered with and Miss Smith finds tampered with and Miss Smith finds out that the care has done at least out that the care has done at least 30,000 miles.30,000 miles.

Advise Miss Smith as to her legal Advise Miss Smith as to her legal position.position.

Put the verbs in brackets into Put the verbs in brackets into appropriate formsappropriate forms

In any contractual situation, it __(require, In any contractual situation, it __(require, passive) that the promise ___(make) by passive) that the promise ___(make) by each party must have some economic each party must have some economic value. However, there is no requirement value. However, there is no requirement that it must constitute a realistic price for that it must constitute a realistic price for the promise it ____(buy). Thus, a contract the promise it ____(buy). Thus, a contract ___(make) to sell a property worth $200,000 ___(make) to sell a property worth $200,000 for the sum of $10,000 is legally valid. It for the sum of $10,000 is legally valid. It would therefore _____(say, passive) to be would therefore _____(say, passive) to be legally binding.legally binding.

KeyKey

In any contractual situation, it is In any contractual situation, it is required that the promise made by required that the promise made by each party must have some economic each party must have some economic value. However, there is no value. However, there is no requirement that it must constitute a requirement that it must constitute a realistic price for the promise it buys. realistic price for the promise it buys. Thus, a contract made to sell a Thus, a contract made to sell a property worth $200,000 for the sum of property worth $200,000 for the sum of $10,000 is legally valid. It would $10,000 is legally valid. It would therefore be said to be legally binding.therefore be said to be legally binding.

Fill in the missing words: contractual, Fill in the missing words: contractual, gratuitous, jurisdictions, legislation, gratuitous, jurisdictions, legislation,

party, promiseparty, promise The main effect of the requirement of The main effect of the requirement of

consideration is that _____promises consideration is that _____promises made by one ___ to another (i.e. where made by one ___ to another (i.e. where one party makes a ____to another party one party makes a ____to another party but no promises are made in return) do but no promises are made in return) do not give rise to ____obligations. not give rise to ____obligations. However, it should be noted that in However, it should be noted that in many ____this requirement has been many ____this requirement has been displaced by ___in respect of certain displaced by ___in respect of certain kinds of contract.kinds of contract.

KeyKey

The main effect of the requirement of The main effect of the requirement of consideration is that gratuitous promises consideration is that gratuitous promises made by one party to another (i.e. where made by one party to another (i.e. where one party makes a promise to another party one party makes a promise to another party but no promises are made in return) do not but no promises are made in return) do not give rise to conractual obligations. However, give rise to conractual obligations. However, it should be noted that in many jurisdictions it should be noted that in many jurisdictions this requirement has been displaced by this requirement has been displaced by legislation in respect of certain kinds of legislation in respect of certain kinds of contract.contract.

contract unit 30. preview definition definition requirements for a valid contract requirements for a...

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