Contract Law: Elements and Application

Running head: CONTRACT LAW
CONTRACT LAW
Name of Student
Name of University
Author Note

CONTRACT LAW1
1a
Contract
As per the provisions of the common law of contract a contract is the mutual agreement
between two parties which is recognisable and enforceable by way of law establishing a
relationship between the parties of the contract. A contract can be seen as legally binding only is
voluntary agreement is seen as existing between the two parties. For fulfilling a valid contract 5
Essential elements are required: offer and acceptance, consideration for the promise and
intention of the parties, capacity to contract, free consent.
Offer and acceptance
As per the common law contract offer is the proposal of an arrangement of a particular
type which is made by one person towards other for acceptance. The common law define
acceptance as a communication of declaring a person's acceptance of any offer and the
willingness for being bound by any term or condition laid down by the offeror in verbal or
written terms. It is the first and foremost requirement of a valid contract. The element of valid
offer was first seen as discussed in the case Carlill v Carbolic Smoke Ball Company [1893],
where the court of appeal held that any advertisement that would be containing the terms for
rewards automatically be considered as a offer of binding nature which person can accept. An
offer would be bound by his offer even if he had no intention of conducting the offer when and
by his words all conducts any reasonable person would be induced to be believing that there is an
existence for the intention of the offeror to be creating a valid contract. This was discussed by the
judges in the case Smith v Hughes [1871]. The judgement of the case Storer v Manchester City
Council [1974] held that if there is an intention of a party to be creating legal relationship and

CONTRACT LAW2
that relationship is binding in a legal which person to whom the order has been addressed
towards.
Another essential element for creating a valid contract is consideration against any
promise that has been made because of the agreement made between the two parties.
Consideration can be described as a promise given by one party to another to be exchanging
something of value like goods or money or even any act or conduct as discussed in the case
Wade v Simeon [1846]. In the case Dunlop Pneumatic Tyre Co Ltd v Selfridge Ltd [1915]
gorgeous described Constitution was the price used for buying someone else's promise. Past
consideration however is not sufficient for a valid contract as seen in the case Eastwood v
Kenyon [1840].
As per the Contract law of England and Wales one of the major elements of a valid
contract is a intention to create a binding legal relationship between the parties. The provisions of
intention to be considered as legally binding for a valid contract has been discussed in the case
Rose & Frank Co v JR Crompton & Bros Ltd [1924]. Applying the principles laid by the court in
the case Balfour v Balfour [1919] intention of the creation of a legally bound contract in case of a
domestic setting can have rebuttal presumption.
Capacity To Contract
The fourth important element in contract is the capacity to contract. The parties of a
contract should have the capacity to be entering into the contract.

CONTRACT LAW3
Free Consent
In this element the parties of contract are required to be entering into a contract with own free
will and consent. No one can force, threaten or coerce a person in entering into a contract.
1b.
Issue
The main issue in the case is whether Ringo is liable to pay to Paul.
Rule
As per the provisions of the common law of contract a contract is the mutual agreement between
two parties which is recognisable and enforceable by way of law establishing a relationship
between the parties of the contract. A contract can be seen as legally binding only is voluntary
agreement is seen as existing between the two parties. For fulfilling a valid contract three
Essential elements are required: offer and acceptance, consideration for the promise and
intention of the parties.
As per the common law contract offer is the proposal of an arrangement of a particular
type which is made by one person towards other for acceptance. The common law define
acceptance as a communication of declaring a person's acceptance of any offer and the
willingness for being bound by any term or condition laid down by the offeror in verbal or
written terms. An offer would be bound by his offer even if he had no intention of conducting
the offer when and by his words all conducts any reasonable person would be induced to be
believing that there is an existence for the intention of the offeror to be creating a valid contract.
This was discussed by the judges in the case Smith v Hughes [1871].