Contract lesson plan 16,3,2011

Simple Contracts by P. Brown

a social agreement between two or more

parties which sometimes may not be legally

binding.

A contract is a legally binding agreement

that is enforceable by law.

All contracts are agreements, but not all

agreements are contracts.

This means that some agreements are not

legally binding.

The law sees all domestic agreements as not

legally binding and thus the court expects the

relative or friend to prove that he/she did

intend to create legal relations.

◦Simple contract

◦Specialty or speciality contract

◦Contract of record

A simple contract is one made by two or

more persons which must have

consideration as an important feature of it.

Offer Consideration

Acceptance

Offer and acceptance of that offer

Form or consideration

Capacity

Legality

Possibility

Genuineness of the parties to enter into a

contract

Good faith

An offer is a proposal or a bid made by one party to another either directly or through an agent.

For an offer to be genuine it must be made by the offeror.

An offeror is the person making the offer or the agent who represents him.

An offeree is the person accepting the offer.

An offer can be oral, implied by conduct or

put in writing. Note that a simple contract

need not be in writing.

An offer must be communicated to the offeree .

It must be clear and precise and can only be revoked or withdrawn before acceptance by the offeree.

This is when the offeror invites the offeree to make him an offer which may be either rejected or accepted.

This is not a genuine offer because an offer

must be made by the offeror.

Goods displayed in a store or a supermarket with a price tag attached.

Goods offered for sale by public tender.

An advertisement inviting tenders for goods.

In law an acceptance is achieved when the offeree unconditionally agrees to all the terms and conditions of the offer.

It must be noted there must be a genuine

offer made and not an invitation to treat, otherwise the acceptance is invalid.

An offer must be communicated before it is considered as legal.

An acceptance must be unconditional- the offeree must not change any of the conditions of the offer. Must be done in the manner stated.

An acceptance must be unqualified – the offeree must measure up to the expectations of the contract and not seek to change it.

An acceptance must also be absolute – all the terms and conditions must be agreed on totally and the offeree should not desire to change any aspect in his favour. Must be accepted within the stipulated time.

Once the offeree changes the terms of the agreement this is a counter offer and is equal to a rejection of the original offer.

An offer made through the post office is effective once the letter is posted. It does not matter if the letter was delayed or lost in the post.

An offer made through the phone, fax machine or any instantaneous means of communication is complete only when received and not transmitted.

Paul and Paula work with the same

accounting firm. Paul promised Paula to

take her to work every Monday morning

when her husband uses the family car out

of town. Paul did not turn up one Monday

morning so Paula was extremely late for

work and her supervisor was very upset.

◦ Paula reported Paul to the boss hoping that he

too would be reprimanded. Paula decided to

take Paul to court for breach of contract.

◦ Advise Paula if she had a contract with Paul in

the first place.◦ If she takes Paul to court, what will be the likely

outcome?◦ What is the difference between a contract and

an agreement?  

Abiraj, BMC. (2006). Principles of business for CXC. 5th ed.

END OF LESSON