Essential Features of a Valid Contract
Added on 2021-06-17
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Q 1.Issue: the issue that arises in discussion on the basis of the facts provided is if Bryce and Damienhad the intention of creating a legally enforceable contract.Rule: Some factors that should exist in the agreement in order to make it enforceable by law.Among these factors is the intention of the parties that they are forming a contract that can beenforced by the law. Another element is related to the presence of valid consideration. As a resultof the obligation concerning the intention of creating legal associations, the cases where anyaction by the courts will not be appropriate, can be sifted out (Peel and Treitel, 2011). Forexample, when two friends have decided to meet for dinner, although there is a moral obligationregarding such promise, but there is no legal obligation to fulfill this promise. In this case, theparties lacked the aim of creating a lawful association. In such cases, the law also acts accordingto the wishes of the parties (Atiyah, 2000). For the purpose of deciding if the courts can enforce aparticular agreement, the difference between agreement stated in context of social or domesticrelations and the transactions made by the parties in case of trade and commerce aredifferentiated (Collins, 2003). Similarly, in case of a valid contract, in return of the promise made by one party, the party isrequired to supply consideration (McKendrick, 2009). As a result, the consideration needs to besupplied in lieu of the promise of other party (Thomas v Thomas, 1842). For example, inRoscorla V Thomas (1842) , the court mentioned that consideration was "used up" and thereforethe promise of other party regarding the soundness of the horse was not supported byconsideration. Similarly, in Re Mcardle (1951) the court stated that past consideration was notvalid.
Application: Therefore, keeping in view the requirements of law, mentioned above and therelevant case law, it can be decided that in the present case also Bryce has been helping Damienwith his personal and business tax returns as he was a qualified accountant. However, Bryce hadonly charged a nominal fee for these services. As a result, Damien had saved a lot of money andhe was indebted to Bryce. But in view of the legal position, it is clear that the services renderedby Bryce only amounted to past consideration. As a result this cannot be treated as validconsideration. Therefore, it was not capable of supporting Damien's promise. But even when theparties are entering into a transaction in connection with trade or commerce, the law providesthat a rebuttable presumption is visible in which it was the intention of the parties to create legalrelationship. However, here a lawful contract has not been twisted among the parties. The reasonis that in this case, consideration is not present in lieu of the promise made by Damian. Conclusion: Here the elements that are required for creating a valid contract do not exist. Forexample, there is lack of consideration in return of the Damian’s promise. As a result, anenforceable contract has not been shaped between Bryce and Damien.
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