Contract Formation

Question 1

What is the definition of a “contract”?

Answer 1

“A contract is a legally enforceable agreement”

Question 2

Is there a requirement for writing (contract)?

Answer 2

Generally, no requirement for writing (but advised as you want to prove there was a contract!)
However, a deed is required for some contracts e.g.
- Land transfers
- Leases
- Appointments of trustees
- Power of attorney
- Businesses have a few contracts that require writing too (eg. shares)!

Question 3

What are the essentials of a valid contract?

Answer 3

OFFER & ACCEPTANCE
INTENTION TO CREATE LEGAL RELATIONS
⟶ Parties intention to be legally bound (eg. friends?)
Law differentiates between a domestic and a business contract
CONSIDERATION
⟶ Price paid for the promise

Question 4

What is important to identify when looking at a case question?

Answer 4

Always identify in C section of CLEO whether it is offer & acceptance or a consideration issue !!!!!
= KEY!!!