A Comprehensive Report on the Key Aspects of Contract Law

This report provides a comprehensive overview of the essential aspects of contract law. It begins by defining a contract and exploring its key elements, such as offer, acceptance, and consideration, highlighting their significance in forming a valid agreement. The report then delves into different types of contracts, including face-to-face, written, and distance selling contracts, discussing their implications and legal liabilities. Furthermore, it examines various contract terms, including conditions, warranties, innominate terms, and exemption clauses, explaining their impact on the parties involved and the overall contract. The report uses case laws to illustrate the concepts. This analysis provides a solid understanding of contract law principles and how they apply in business and legal contexts.

Aspects of Contract

Table of Contents
Aspects of Contract..........................................................................................................................1
INTRODUCTION...........................................................................................................................3
TASK 1 ...........................................................................................................................................3
1.1...........................................................................................................................................3
1.2...........................................................................................................................................4
1.3...........................................................................................................................................5
TASK 2............................................................................................................................................7
2.1...........................................................................................................................................7
2.2.........................................................................................................................................10
Case 2...................................................................................................................................10
Case 3...................................................................................................................................11
Case 4 ..................................................................................................................................12
2.3.........................................................................................................................................12
Case 5 ..................................................................................................................................12
Case 6...................................................................................................................................13
TASK 3..........................................................................................................................................13
3.1.........................................................................................................................................13
3.2.........................................................................................................................................14
3.3.........................................................................................................................................14
TASK 4..........................................................................................................................................15
4.1.........................................................................................................................................15
4.2.........................................................................................................................................15
CONCLUSION..............................................................................................................................16

INTRODUCTION
The main purpose of this project is to understand the various issues arising out of
contract. It has been seen that contract is one of the essential element of business. It is very
essential for all those person who has been into the field of business to understand that what
contract is and how it has to be made (Aje, 2012). There are various situation while making up a
contract, so it is very important to know the essential things to be required while making up of
contract. The project will showcase different scenario in which it shall be reflect that contract is
being one of the essential thing in the life of people who are doing any dealing of any business.
The project file will demonstrate pure knowledge and skills about contract and its related
aspects.
TASK 1
1.1
A contract is a very essential aspect in the life of people. It has been observed that all the
business class of society or all those people who wants to do any business in the market shall
have all the knowledge about how the formation of contract is done. It is really important to
know and gain the little knowledge about making up of contract because such formation of
contract are related to legal obligations hence where there shall be any alteration in the contract a
legal obligation will automatically arise and liability will fall on the person (Ali and Kumar,
2015). For making up of valid contract in the eyes of law there are some essential elements
which shall be included while making up of a contract. That are:-
 Offer- While making up of a contract it is really important to make an offer. If any party
want to enter into a contract with another party then one of party has to make a valid offer
which shall include the intention of a person for making a contract or deal. Until and
unless an offer has been made no contract shall be formed by the party. Case law: Harvey
v Facey [1893] UKPC 1 & Carlill v Carbolic Smoke Ball co [1893] 1 QB 256.
 Acceptance- When the offer has been made by one party, the role of another party starts.
The other party, if finds that offer which has been made is justifiable then he, with his
consent may accept the offer. If both the party have an interest in making up of a contract
the offer shall be made with one party and acceptance by another party. An offer is said
to be accepted by the unconditional and unqualified assent to its terms by the

offeree. There are three main rules relating to acceptance:
it must be communicated to the offeree, terms of the acceptance must exactly match the
terms of the offer & agreement must be certain. As an illustration, following case laws
can be considered: Entorres v Miles Far East [1955] 2 QB 327, Felthouse v Bindley
[1862] EWHC CP J35.
 Consideration- While entering into a valid contract, both the parties must have a valid
consideration towards the contract. Here consideration means the will to avail the profits
which have been occurred due to the formation of contract. This has been the essential
element to enter into a valid contract (Boundy 2010). There are various rules governing
the law of consideration: it must not be past, it must be sufficient but need not be
adequate & must move from promise.
 Agreement- when the offer has been accepted by the party with consideration then for a
formation of valid contract, agreement is necessary. An agreement can be oral or written
where both the parties will show the intention to enter into contract. To avail benefits
from the contract, the agreement must have a lawful object
 Enforceable by law- the agreement which is being made shall be enforceable by law.
Hence, there are some of the essential elements which shall be taken into consideration while
forming a valid contract. When Peter Abram enters into any form of a valid contract he must
have knowledge of formation of contract and should take care of these essential elements.
1.2
There is not only one kind of contract formation. The formation of contract depend upon
how it has been made and what are the situation under which the contract has been made. It is
important to know the type of contract in which party enters as various contracts have different
legal liability. As peter have very less knowledge about contract, then it is very necessary for him
to know in which kind of contract he is entering into (Boundy 2012). Different contract have
different impact on the parties as well as on the contract. There are various kinds of contract
which a party can enter into. These are:-
 Face to Face contract- this is kind of contract which has been made on face to face.
While making up of a contract, both the parties are being present at a place. Here the
presence means parties has to be present in person and shall be facing each other while
making up a contract. A face to face contract is very convenient form of contract. In this

there shall be no confusion remain in the mind of the parties. All the doubts regarding the
formation of contract or anything which comes to the mind of party shall be clear out on
the spot. This kind of contract is one of the most favourable contract to be done by the
parties.
 Written Contract- a contract which has been done in the form of documents is known as
written contract. In other words when both the parties are willing to enter into a contract
by making an offer to another party resulting into acceptance, consideration and then
agreement. But such agreement when made in written, known as written contract
(Camén, Gottfridssonand Rundh, 2011). The positive side of making a written contract is
that it shall be in a recorded form and claim can be raised easily. Written contract also
bring some grantees to the contract also.
 Distance selling- it is very traditional kind of contract which is being made up till now
but the parties who are willing to enter in a stable and valid contract does not choose to
make a contract on distance. A distance contract is basically when the offer and
acceptance with consideration of the party to another party has been made on a telephonic
conversation because of distance. Distance contract is not a reliable kind of agreement as
it does not assure any guarantee to the parties. In a distance selling contract, parties at any
time can withdraw because whole contract has been carried out on a telephonic
conversation and there shall be no record of telephonic conversation (Camén,
Gottfridsson and Rundh, 2012). It has been said that a telephonic conversation can be
recorded for the claim when there is any illegal activity but a recorded form shall not be
acceptable by court of law.
Hence, these are some of the important form and situation of a contract making. Peter shall
have all the information about in what form a contract has been made in order to raise any legal
obligation against parties competent to contract.
1.3
When a contract has been made between the parties then there are several terms to be
used while making a contract. It is essential to include all the important te4rms while making up
of a contract because they are equally important. The terms reflect the b as of a contract. There
are various other clauses which have been mentioned in a contract. Such terms help in knowing
the base or the gist of the contract (Chileshe, Khatib and Farah, 2013). There are various kinds of

terms to be applied in a contract which have different effect and impact on the contract as well as
on the parties competent to contract. These terms are:-
 Conditions- When the contract is being made there is a term used called 'terms and
conditions' such terms has been used by various contract. It is because while making up
of any contract there are various kinds of rights or the set of rise which arise due to the
formation of contract and with the rights given to party there are always legal obligation
in respect to contract. Basically condition is mentioned in contract in order to ensure the
legal obligation of the party competent to the contract. Here obligations means
restrictions. There are various restrictions to be made under a contract which is being
applicable in the contract such restriction impose a responsibility to fulfil the legal duty in
which the parties have been bind with the contract. If peter enters into a contract then he
must mention a condition which will raise a legal obligation. These conditions are
peculiar to contract.
 Warranty- In a law of contract, the term warranty has lot of meaning but one of the most
important meaning arise in a contract is warrant means promise. Warrant is the simplest
form of element present in a contract. When a contract has been made between the parties
then they must ensure there shall be a kind of warranty present. A promise to fulfil legal
obligation by the parties. A warranty provide an assurance or promise to both parties to
make it believe that all the conditions which are being mentioned in the contract are true
and there is a certainty to happen.
 Innominate terms- As it is a clear fact that when a contract is being made several terms
has been introduced in the contract. Such terms are known as conditions or the warranties
which are being imposed in a contract to the parties. Besides such implied terms there are
many other terms which have been a party of contract (Christian and Campbell, 2009).
Such terms are known as innominate terms which are except condition and warranty.
When such terms have been introduced in a contract they comes under exclusion clause.
The main purpose of adding exclusion clause is then when any of the party wants to add
some extra or exclusive clause into the contract then it has be count under exclusion
clause. For an example if peter make a contract with a construction company asking for 6
packs of cement but he made an exclusion clause that cement shall be of XYZ company
and shall be packed into wooden box. Such shall not be covered under warranty clause of

the contract. The innominate terms shall looks into the breach of conditions which have
been mentioned in a contract.
 Exemption Clause- Exemption clause has been generally added to a contract when the
parties competent to contract wants to add something into the contract in which the
liability has been exempted that is when there shall be breach in contract it will result into
rise of liability on the parties but in some of the cases exempted clause has been added
which shall define the exemption of the party on which the liability has not been carried
out. The legality of an exemption clause shall not be challenged by either of the party in
court of law as the clause explicitly state about the exemption of the party from any kind
of legal obligation or legal liability. By adding an exemption clause to the contract, the
risk of getting damages and strict liability falls decrease as in few thing of situation the
parties shall be exempted. In the case of Olley v Marlborough Court (1949), the court
decided that the terms of the exemption clause were too late. The exemption clause can
be added by either of the party. It is not a compulsory issue that exemption shall be
implied and expressed by only one party (Hansson and Longva, 2014).
Hence, these are some of the terms which peter shall took care of while making of any
contract. There terms hall be included in the formation of a contract in order to make the contract
much more effective and valid. When peter makes any contract with any other party he shall take
care of the use of all different terms in order to establish the liability too.
TASK 2
2.1
In this case it has been seen in this case that a seller has posted an advertisement of
selling an apartment which is semi furnished. Carlo, who is looking for a place to live, after
reading that advertisement, contact through email reflecting her desire to buy an apartment. Here
the question has been asked that whether both the parties have made a valid contract or not.
According to the law of contract there are few essential elements which should be present in the
contract in order to make it valid. By the presence of these elements only, the contract can be
enforceable by law and shall be titled as a valid contract for the parties and for the court of law
(Jardat, 2012Johansson, Siverbo and Camén, 2016). The important elements for the formation of
a valid contract are:-

 Presence of parties- In the making up of a contract it is very essential that there shall be
2 parties competent to contract between whom the contract can be made. In the given
scenario, it is clear that there are two parties present in a contract one who is entitle with
seller and another is entitled buyer. In the given scenario the carol is the buyer and
Gumtree is the seller(Kujala and Nuottila, 2015). They both can be in a contract for
buying a leather couch. Carol has mailed the seller to get the deal of that couch.
 Offer to make: In the validation of contract, the first and foremost thing shall be, there
should a valid offer which has to be made by one party to another party. In this given
scenario it can be seen clearly that the seller has made a valid offer to the buyer in context
of selling an apartment by posting an advertisement in the paper. The offer made by the
seller seems to be a valid offer and offer for a lawful object. Without offer intention shall
not be shown to the party for entering into a valid contract. In the given context the
Gumtree have made an offer to sell the leather couch(Kujala and Nuottila, 2015). The
offer has been displayed by an online classified ad. In this offer the buyer has e-mailed to
seller clearly that she wants to buy that couch.
 Acceptance- The very next step which has to be taken after offer is the acceptance of
offer. It is to be assumed that when offer has been made by one of the party then if the
other party is interested in entering into a contract the he shall have to accept the offer
which has been made by the party. Without acceptance it shall not be clear on the part of
the other party that he is interested in making up of a contract with the other party.
Acceptance shows an intention of the party to enter into contract and avail the benefits
which have been arising out of it. In the present scenario it has been seen that the buyer
has sent an email to the seller showing intention which makes it clear that the offer has
been accepted the party and she is interested in entering into a valid contract of sale and
purchase (Kujala and Nuottila, 2015). The given scenario have a seller and a buyer.
Buyer and seller both have accepted the offer on their end. Seller made the offer by
posting an online ad and at the other end buyer have mailed for purchasing. So they have
made acceptance which shows their interest in the deal(Kujala and Nuottila, 2015).
 Consideration- This element is the next step towards the formation of a contract. It is
very essential for a making of a contract that there shall be consideration on the context
of which the contract has been made. Here the term consideration means, a set of rules or

legal obligation which has been arise due to the formation of a contract. In the present
scenario it has been clearly seen that the buyer has accepted an offer to contract and
shown an interest of buying the apartment if all the formalities has been done by the
seller and at the end the buyer withdrew his consent that shall be illegal because here the
buyer has given his consideration to buy the apartment and an acceptance that if the three
shall be breach then legal obligation shall rise for the party. Consideration is the essential
factor in any contract. From the given case the buyer have made the acceptance and she
has considered the offer of seller that she is interested in that but at the end if she will
refuse to be involve then it will be wrong and it can be considered a illegal
movement(Laryea and Hughes, 2009).
 Agreement- An agreement is very essential for making upon a contract as in an
agreement the parties are being legally bound for the arrangement in order to fulfil the
cause of action. An agreement when made between the parties it make the parties to bind
legally into a proposal. It is because when at any time of the agreement either of the party
without a reasonable cause withdrew his consent from the offer then some legal actions
shall be brought against him. An agreement can be made either orally or written but in
this case it has been seen that no agreement has been made between the parties the
process of binding up into a contract was followed till consideration no agreement has
been formed between the parties (Laryea and Hughes, 2009). There is only acceptance of
the party which she has shown by sending the details of buying by Email. In the given
case buyer has given his acceptance so carol have mailed but there is no response from
the Gumtree so they have not signed any kind of agreement for buying and selling(Laryea
and Hughes, 2009).
Cases-
Balfour v Balfour
It is one of the landmark case in the history of contract. It has be shown in the case that
how a valid contract can been enforceable between a husband and a wife also. Here in this case
Mr. Balfour has to go to another city for work purpose. As Mr Balfour is civil engineer in the
company but his wife was an artist and had an interest to stay up the city where they are already
located. Mr. Balfour promised his wife that he is going to send some money to her monthly. But
soon after the shift Mr. Balfour has informed his wife that it is better to part ways.

Here, in this case it has been seen that the husband has made a valid contract with his
regarding providing a money for the expense as the husband was shifting to another city. Here an
offer has been made to wife and wife has accepted the offer with consideration but soon after the
husband has left he decided to part ways and not to provide money to wife that shall amount into
the not forming a valid contract by the party. There are not any specified statues present in the
law for the formation of making a valid contract but there are various elements which are being
mentioned by the contract of law in order to form a valid contract between the parties
(Middlemiss, 2011).
2.2
Case 2
The present scenario presented states the about the condition of a dad whose son has
applied for job in a firm with other members the son got selected in the it firm but the dad was
unknowing of the fact that he has been selected for the made an offer or the consideration to
George for some sum amount of money to payable to George in case he offers the job to Devi.
The letter has been received by the firm. Now the question of law which has been raised in the
scenario id that whether George can enforce a promise or not. The answer to this question is that
yes he can make the promise enforce as the consideration has been made on the part of Peterson
and George. In a consideration there is exchange of one thing in the value of other. It is one of
the essential element of all the six element. In this case it has been observed that there was a
valid consideration formed on the part of the parties where the exchange of value in place of
another has been seen (PADHI, 2012). Consideration is one of the important aspect while
forming a contract. When a contract is being made consideration has been given by both the
parties which shall give rise to legal obligations and barriers once the consideration has not been
fulfilled. In a contract a legal obligation can only take place when there shall be consideration on
account of both the parties. There are certain elements of consideration that shall be present like
 consideration shall not be made in past
 it shall be sufficient in nature
 The consideration shall be from promise.
In the given case the most important factor is the legalised movement of George.
Preston's son Devi is already hired by IT firm but George have not said this to his father so his
father have tried to help him. On the other side George knows that Devi is already hired but so he

can either enforce the promise of his father but it will be illegal from each side( PADHI, 2012).
For making all the movements legal, George has to convey Preston about the contract he has
made with his son because making another contract with Preston will be an invalid
consideration. George can enforce the promise of Preston to get benefits from both sides. He can
use the amount for the development of its IT firm.
Case 3
In the case study of Thomas v Thomas it has been seen that a one sided consideration
shall not be counted in contract. A one sided consideration shall always be taken as gift by the
study of the different case study it has been seen clearly that consideration has been considered
one of the important part of contract. Hence it is very necessary for a party to show the
consideration respective to contract.
Exclusion clause in a contract refer to such clauses of contract which have been added
exclusively that when a contract has been made by the party there are various terms which are to
be included in making up of a valid contract. Without the use of such terms the contract cannot
be able to achieve its motive. Such terms could be the conditions or the warranties which shall be
given to the parties by entering into a contract. But there are some of the other clauses which are
to be added in the contract but doesn't count under implied contract. These are known as
exclusive clause of the contract. When the party wants to add any additional information with
regard to the contract then such information shall be added to exclusion clause. For example in
the given scenario it has been clearly mentioned by the restaurant that when a visitor or the guest
handle his belongings then he should take out all his valuable belongings (Rabbani and et. al.,
2015). The restaurant shall not be held liable for any kind of loss of any of the valuable item.
Here the restaurant has made an exclusion clause where it has clearly mentioned that it will not
take care of any of the valuable belongings of a guest. Later on in this case it has been seen that
the wallet of the person get stolen and he make the restaurant liable to pay all the damages which
he has suffered due to the loss of his wallet. Here the question of law has been arises that
whether the restaurant shell be held liable to pay the customer for the losses he has suffered due
to the stealing. The restaurant shall not be held liable at any cost as it has been already mentioned
by the restaurant by adding an exclusion that it shall not take care of any of the valuable item
hence it shall not be held liable for paying any of the damages to the customer. An exclusion
clause has been added to any of the contract in order to show the intention of the party which is

different than that of the contract made. And new addition to the contract or any new provision to
the contract shall be added to exclusion clause. Exclusion clause is by itself is self-denoted to
expresses any new change which have been added to contract.
Hence, an exclusion clause is very important to add in a contract in case either of the party
has an intention rather than of what is being mentioned in a contract (Roubelat, 2012).
In the given case the management of restaurant have already mentioned a exclusion clause
to the receipt so they can rely on that clause thus the management can refuse to accept the claim
of customer(Roubelat, 2012). The exclusion clause is made up for all the visitors in restaurant so
they can not refund any of his visitors for their loss.
Case 4
Aroma shall not be held liable to pay compensation because when the contract has been
made between the tenant and the owner it has been an implied term that the rent shall not be
increase but after the death of the owner the price of the property has been increase (Ali and
Kumar, 2015). In this case the plaintiff shall not be held liable to pay compensation to the party
as it was no implied terms mentioned in contract. In such case Aaron have signed the agreement
with Zehphra that the rent will not be increased for next 5 years but after Zehphra died Yeti is the
new owner of that house. He has increased the rent which is completely goes against the law and
agreement. The Aaron is not payable to Yeti because Aaron have made expenses top repair so
many things in that house. Yeti have two options now either she has to be agree with the
previous contract or she have to pay Aaron for all his expenses on house.
2.3
Case 5
In this case the insurance doesn't possess any right to void the policy of the policy holder. As
when the insurance has been done of the policy holder he has been asked only about the
accidents which have been occurred to the holder. There was no mention of theft. It was not at all
an implied condition that the policy holder shall state about the previous theft hence it is clear
that the policy right has not been void (Roubelat, 2012).
In this case the insurer can not reject the claim of policy holder and even the insurance have
no right to void the policy because it does not matter that policy holder had made a theft claim in