Formation of Contractual Relationships

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FORMATION OF
CONTRACTUAL
RELATIONSHIPS

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TABLE OF CONTENTS
1. INTRODUCTION...............................................................03
2. EXPLAIN THE VARIOUS ESSENTIALS OF A VALID
CONTRACT.......................................................................03
3. EXPLAIN COURT SYSTEM OF UK AND ADVISE PARTIES TO
WHICH COURT THEY CAN APPROACH.................................
05
4. ADVISE HILARY WHETHER CONTRACT EXIST BETWEEN HER
AND OTHER PARTIES: ELEANOR, AMY AND OLIVIA.............05
5. EXPLAIN ALL THE AVAILABLE REMEDIES UNDER CONTRACT
LAW..................................................................................06
6. CONCLUSION.....................................................................06
7. REFERENCES.....................................................................07

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INTRODUCTION
A business organization has to follow various laws in order to carry their day to day
business transactions. One of the law which is widely used while carrying on business activities
is Law of Contract. In every transaction of a business the formation of the contract take place.
This contract can be either oral or written. If any of the parties breaches such contract the party
who has suffered the loss due to such breach can approach court to claim the compensation.
While awarding the compensation the court must see that there were all the essentials of a valid
contract must be present such as offer, acceptance, consideration and intention to enter into legal
relationship etc. here in this project various essentials of the contract will be discussed.
Further various fact based problems will be examined whether the valid contract has been
formed between the parties or not. It will also be discussed that what all remedies are available to
the parties.
MAIN BODY
Explain the Various Essentials of a Valid Contract
A valid contract can be defined as “such an agreement which is legally enforceable
and is having a legal binding effect”. There are various essential of a valid contract which
should be present in the contract to make the agreement as legally binding upon the parties. If a
valid contract has been formed between the parties, if any of the party breaches the existing
contract the other party can claim the damages for such breach. While awarding the amount of
compensation the court will examine the validity of the contract by identifying that all the
essentials of a valid contract are present or not. The first essential or the first step towards the
formation of a contract is Offer(Abd Rahman, 2019). The offer can be defined as a proposal
given by one person to another for a certain thing. For instance, if Mr. A tells Mr. B that he
wants to sell his house for $100 to Mr. B, it will amount to an offer. It must be taken into
consideration that an offer should be distinguished from an Invitation to Offer. Many people get
confused between these two. It should be noted that the offer is the first thing or step towards
formation of a contract whereas an invitation to offer is a former stage after which the offer is
given(Allen and Kraakman, 2016). The first landmark judgement in which this distinction was
made was Harvey vs Facey (1893) in which the Privy Council has said that the telegram sent by