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UNIVERSITY OF TECHNOLOGY, JAMAICA


FACULTY OF THE BUILT ENVIRONMENT

SCHOOL OF BUILDING AND LAND MANAGEMENT


Course: Professional Practice

FUNDAMENTAL ELEMENTS OF THE LAW OF


CONTRACT

Prepared By: Shemar Royal I.d:0700186

Lecturer: L. Burke

Fundamental Elements of the law of contract

TABLE OF CONTENTS
Introduction ............................................................................................................................................................................... 3 Offer............................................................................................................................................................................................... 3 Acceptance ................................................................................................................................................................................. 4 Consideration ............................................................................................................................................................................ 4 Intention to create legal relations .................................................................................................................................... 5 Capacity ....................................................................................................................................................................................... 5 References .................................................................................................................................................................................. 6

Fundamental Elements of the law of contract

INTRODUCTION
To understand the fundamental elements of the law of contract, it is important to obtain a comprehensive definition for the term contract. A common definition of the term is An agreement between two (2) or more parties which is enforceable by law". By this definition, it is understood that for a contract to exist, there must be an agreement but the agreement must be enforceable by law. According to (Denicola, 2004), for a contract to be enforceable by law, it must contain the following legal elements: 1. Offer 2. Acceptance 3. Consideration 4. Intention to create legal relations 5. Capacity In this paper, the researcher will explain each of these fundamental elements of the law of contracts in detail.

OFFER
According to (Emanuel, 2006), An offer is the manifestation of willingness to enter into a bargain. The author further went on to state that The offer justifies another person that his assent can conclude the bargain In other words, an offer is something that creates a power of

Fundamental Elements of the law of contract

acceptance. A more common definition for an offer is; A definite promise or proposal made by the offeror to the offeree with the intention to be bound by such promise or proposal without further negotiation. The offer is usually the step preceding the acceptance.

ACCEPTANCE
This is essentially the second stage of the contract process. Emanuel (2006) defines acceptance as A manifestation of assent to the terms thereof made by the offeree in a manner required or invited by the offeror so that a binding contract is formed. Acceptance comes into existence after the offeree unconditionally accepts the offer.

CONSIDERATION
According to (Young, 2010) Consideration is the detriment to the promisee (in that the promisee parts with something of value) OR some benefit to the promisor (in that the promisor receives the value). Consideration may consist of money, goods, a promise or suffering some detriment (e.g. forbearance to sue). The author further stated that in law, consideration must be sufficient but need not be adequate. For example, Dave can sell his red BMW, which is worth $10 million to Jacqueline for a value of $10 and there is still a perfectly good contract between them. Once both parties have agreed and both have furnished consideration, there is a contract.

Fundamental Elements of the law of contract

INTENTION TO CREATE LEGAL RELATIONS


For a contract to exist the parties to an agreement must intend to create legal relations. Usually, the presence of consideration will provide evidence of this - if the promisor has specified something as the price for the promise this - in most cases - carries with it an intention that the parties be bound. Intention remains, however, an independent requirement and must be separately demonstrated and there are cases in which consideration has been present but no contract found to exist because this pre-condition has not been fulfilled. The courts established this public policy to avoid being deluged by domestic disputes. In the case of Balfour vs. Balfour (1919), Lord Atkin stated, All I can say is that the small courts of this country would have to be multiplied one hundredfold if these arrangements were held to result in legal obligations. They are not sued upon, not because the parties are reluctant to enforce their legal rights when the agreement is broken, but because the parties, in the inception never intended that they should be sued upon. Agreements such as these are outside the realm of contracts altogether.

CAPACITY
Stone, 2003 stated that capacity is needed before an enforceable contract can be made. The author further stated that the issue can be viewed from the opposite point of view, that is; incapacity can be regarded as a vitiating factor which prevents a contract from being enforced. The law of contract recognizes that in some situations people need protection from themselves, in that they may enter into agreements which may not be to their benefit. The three principal types of incapacity are: being a minor (under 18); being mentally incapacitated; and being intoxicated.

Fundamental Elements of the law of contract

REFERENCES
Denicola, R. (2004). The Law of Contracts: Pearls of Wisdom. In R. Denicola, The Law of Contracts: Pearls of Wisdom. Boston: Boston Legal Publishing. Emanuel, S. (2006). In S. Emanuel, Contracts. New York: Aspen Publishers . Stone, R. (2003). Contract Law Q&A 2003-2004. In R. Stone, Contract Law Q&A 2003-2004. London: Cavendish Publishing Ltd. Young, M. (2010). Contract Law: The Basics. In M. Young, Contract Law: The Basics. New York: Routledge-Cavendish.