Detailed Report on Contract Law: Formation, Validity, and Agency

This report provides a comprehensive overview of contract law, focusing on the essential elements required for the formation of a valid contract, including offer, acceptance, consideration, and contractual intention, while differentiating between valid and void contracts with reference to case law. It examines a practical scenario involving Avril and Belinda to determine the presence of a valid contract, concluding that no contract exists due to issues with acceptance timing. Furthermore, the report delves into agency contracts, illustrating the roles and responsibilities of the principal, agent, and third party through the case of Charlie, Darwash, and Eddie, clarifying that the principal (Eddie) is responsible for losses and damages, and the agent (Charlie) is entitled to commission, while highlighting the remedies available to Darwash. The report concludes by emphasizing the importance of fulfilling all contractual elements for a valid agreement and the principal's responsibility in agency contracts.

REPORT

Table of Contents
INTRODUCTION...........................................................................................................................3
QUESTION 1...................................................................................................................................3
QUESTION 2...................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
A contract refers to an agreement which is enforceable by law and contain a valid
consideration. For the formation of contract there must a requirement of existence of certain
elements including offer, acceptance, consideration and enforcement (Chalkidis,
Androutsopoulos and Michos, 2017). In case of agency contract also there will be same
conditions except the involvement of additional third party called agent. In this report a practical
approach with the formation of valid contract will be presented with the context of case law.
Likewise, an agency contract will also be presented in the report.
QUESTION 1
Contract:
As per the contract act it is an agreement which is enforceable by law and it will give rise
to obligations. This means that in order to form a contract there must be agreement (Chalkidis
and Androutsopoulos, 2017). It is also to be noted that an agreement will be form when one part
will make an offer which will be accepted by another party.
Conditions for forming the contract:
There must be three main conditions and requirements for the formation of contract:
Agreement:
It is an essential aspect with the formation of contract. It will be come into effect when
there will be an offer by one party which will be accepted by another and it will ultimately lead
to the formation of contract.
Offer:
It is an expression to contract with the inculcation of specified terms and conditions and it
is made with an intention that it will be binding on other person who will make acceptance.
Acceptance:
It a final and unqualified assent of the opposing part with regard to the terms and
conditions of offer (Smits, 2017).
Consideration:
There will be no use and implication of promise until there will be come value and
consideration involved in it. This means that a promise will be valid only with the presence of
some consideration.

Contractual intention:
This means that the entire contract and agreement will be void if there would be no legal
binding and intention. This means that the formed contract must be legally binding and
enforceable by law (DE ALWIS, 2020).
On the basis of above requirement, there are generally two major form of contract that
may include valid and void. This means that a valid contract will contain all the necessary aspect
with regard to the contract but in case of void contract these elements will not be present. It is
also to be noted that the valid contract are enforceable by law and can be challenged but the void
contract has no legal existence.
Type of contract in case of Avril and Belinda:
In case of Avril and Belinda there will be no contract. This is because as in the case when
an offer is made by Belinda to Avril with regard to shed building and when it is being accepted
by Avril with the offering of consideration of £750 in writing then an agreement come into force.
However, it is remained open for its acceptance for a period of 7 days and when it is still not
accepted by Belinda then there will be no formation of any contract. However, as again an offer
is being raised by Belinda with regard to the acceptance but it is done after the period of
acceptance, which will be taken as void. This means that it will be a formation of the new
contract. Here it is to be noted that an offer on new price by the Avril will be taken as differently
a new contract. Thus, it can right to said there will be no contract which will come into force.
This means that there will be no rights and responsibilities in association with the Avril
and Belinda. This is because when the contract was open for acceptance then no assent is being
received from the Belinda and when she sends her acceptance then the duration of the acceptance
was over. Now making an acceptance and in return receiving of quotation will be a new contract.
This means that if this contract will be accepted by Belinda then it will come into force which
will be followed by the formation of rights and responsibilities.
Thus, in the current case and situation there will be no contract because all the necessary
elements of a contract are missing right from acceptance which is an important aspect with the
proceeding of the formation of a contract. This will be categorised as void contract because the
main contract is still not formed because a new offer is made without the presence of acceptance.

QUESTION 2
Agency contract:
It is an important type of contract under which there will be three parties including and
offerer, an acceptor and an agent. Here an agent plays an important role which means that it
work for the principal and in return get commission for rendering its services. It is here to be
noted that the agent is not responsible for the incurring of any loss and damage because it is
working for the principal and it is the duty of the principal that it will take care of all the work
(Datta, Giupponi and Machin, 2019). This means that the agent is having a right to get
reimbursed for all the expenses which is being incurred by it from the principal. In the same way
it is also important that the agency contract will be implied with a good faith (Story, 2020).
In the current case also there are three parties named as Charlie, Darwash and Eddie.
Here under this case Charlie is working as an agent whose responsibility is to find work for
electricians. This means the principal party is Eddie. As in the current case as Darwash made
contact with Charlie which itself working as an agent for the work of home regarding electricity
fixing. In the current case as an acceptance is being send by the Darwash to Charlie regarding
work which is being accepted and moved to the principal regarding work completion. And now
when the work is completed and Darwash was not happy with the work and need to be redone
again. It is also to be noted here that there is also a mistake of the Darwash because when it said
for the acceptance of quotation, then it does not hear back from Charlie. This means that Charlie
was not able to communicate other details with regard to the contract. Then under this case it is
to be concluded that:
 With regard to Darwash in the context of Charlie and Eddie there will be an agency
contract because of the presence of an agent.
 As the principle will be responsible for all the losses and damages so in the current case
also there will be responsibility of the Eddie because it is working as a principal. This
means that the right of the Darwash with regard to filing case or the demand of work will
be redone will be made to the Eddie because her the mistake is being performed from the
principal itself which means that all the damage will be borne by the Eddie.
 In case of receiving of demand of extra payment of £500 from the hand of Charlie will
need to be paid by the Darwash because it is an agency contract wherein a sum will be
paid as commission to agent. But in the current case as Charlie is working for Eddie thus

the payment of commission is to be made from the Eddie's hand and not from the client
hand i.e. Darwash.
 In addition, of this it is also to be noted that with regard to the re performing of work,
Eddie will be responsible and Charlie have a right to sue it.
 This means the remedy which is available to Darwash will be the re-performing of work
which will need to be done from the Eddie's side.
 Here there will be no responsibility and liability of Charlie because it is just working as
an agent and no work is being performed from its side.
 In addition, of this it is also to be noted that if the work is to be done form the Charlie's
side too then also the responsibility and liability of all the work will be of Eddie because
it is an agency contract wherein all the responsibility is of the principal and not the agent.
 Apart from this it is also to be noted that, when communication was taking place then at
that time Darwash did not make hear what is being communicated from Charlie. Hence,
in this case there will also be some mistake of Darwash. But as the work is done and
contract is performed with the existence of Eddie as principal so it can make recovery
from it.
 As the damage in the form of not working of work and not meeting the targets from the
Eddie's side will be meet by it because it is the principal and the contract is an agency
contract. Thus, Darwash is having all the rights with regard to the re-performing of the
work.
CONCLUSION
From the above report it would be concluded that formation of contract will be made only
when all the essential aspects of the contract are present that include offer, acceptance and
consideration. It is also important that it must be accepted within the given time period otherwise
it will be void. Likewise, it is also understood that under the contract of agency there are usually
three parties and under which the principal is responsible for all the losses and damages from the
agent's side too.

REFERENCES
Books and journals
Chalkidis, I. and Androutsopoulos, I., 2017, December. A Deep Learning Approach to Contract
Element Extraction. In JURIX (pp. 155-164).
Chalkidis, I., Androutsopoulos, I. and Michos, A., 2017, June. Extracting contract elements.
In Proceedings of the 16th edition of the International Conference on Articial
Intelligence and Law (pp. 19-28).
Datta, N., Giupponi, G. and Machin, S., 2019. Zero-hours contracts and labour market
policy. Economic Policy. 34(99). pp.369-427.
DE ALWIS, M.A.D.H.A.V.A., 2020. Ealing Law School.
Smits, J.M. ed., 2017. Contract law: a comparative introduction. Edward Elgar Publishing.
Story, J., 2020. Commentaries on the Law of Agency. BoD–Books on Demand.