Contract Law: Essential Elements for a Valid Contract and Case Analysis

CONTRACT LAW
Case-1:
As per the Contract Law, A contract is an agreement between the two or more
parties which is enforceable by law. Every business transaction generally has or
may not be a valid contract, only those agreements which are enforceable by law
shall be a valid Contract(Australiancontractlaw.com, 2019). For a valid Contract, there are
some requirements to be complied with.
Four Essential elements for a valid contract:-
 An Offer- There must be an offer by the offeror ( who makes the offer) to the
offeree( who receives the offer) as an agreement depends on the
communication between the parties. An offer may be in writing, oral or
implied. The contractual liability arises only when both parties agree to enter
into a contract(Know, 2019). However, sometimes there may be a unilateral
offer which means the offeror offers to the general public or a large group of
people, in this case, anyone who knows about this offer either by reading or
hearing or any other way can enter into a contract.
 An acceptance- The party to whom the offer is made by the offeror shall
accept the offer to enter into a valid contract. The acceptance must be
communicated to the offeror by the offeree. Acceptance may be made by any
means either by writing or orally. There is an exception to the general rule, in
case of an offer to a public or large group of people there may not be a
communication for the acceptance. The acceptance to an offer must be
absolute and there shall be no variation to the terms of the contract while
accepting the offer, if the offeree changes the terms to the offer it will
amount to counter-offer which invalidate the primary offer.
 Consideration- For a valid contract, there must be a consideration. The
consideration can be anything from one party to another party. Where there
is no consideration in an agreement it will amount to gift and is not able to
treat as a valid contract. In case the consideration is not present in a
contract, it shall be treated as a VOID contract.

In the given case, Buster Brady gave an offer by placing an advertisement in the
local newspaper, this can be termed as a “UNILATERAL OFFER”, in this form of
contract there is no need to communicate the acceptance to the other party. In the
case of “
Carlill v. Carbolic Smoke Ball Co.", it was held that there is no need to
communicate the acceptance while the offer is made to the public at
large(Casebriefs.com, 2019). In the given case Buster Brady made an offer through an
advertisement which can be accepted by any one. Tommy, a homeless person
accepted the offer by finding the “Big Joannal” from the lake, although Tommy did
not know about the offer at the time of finding the Big Joannal but he entered into a
contract as soon as he fulfills the requirements.
Right of offeree and offeror- An offeree can sue a offeror for the breach of
Contract, i.e not giving $10,000 to Tommy, who participated and won the
competition as mentioned in the advertisement by the Buster Brady. Tommy can
claim $10,000 from the Buster Brady even if he did not communicated the
acceptance to the offeror. The offeror shall pay the reward money to the offeree.
However, there is an exception to the rule “ the offeree must know about the
reward before the actual performance”, the act shall be done by the person who are
actually aware of the competition. Hence, offeror can use this exception as an
defence under the court of law.
Case 2:-
In the given case, Buster Brady made an offer to Tommy for making an
advertisement for bringing in more business for a consideration of $10,000, which is
to be paid in monthly installments by the Buster Brady, which is accepted by the
Tommy. However, Brady refuses to pay until the December to Tommy .
However, Tommy made a further contract with Brady to make a full & final
payment of $2,000 instead of $ 5,000 which will be termed as “COUNTER
OFFER”, which is further accepted by the Brady.
An agreement arises when the offeror makes an offer and offer accepted by the
offeree. There shall be both offer and acceptance to constitute a contract. In case