1. INTRODUCTION TO CONTRACT LAW
Law for Business
INTRODUCTION TO CONTRACT LAW

2. DEFINITION
“a contract is an agreement which legally binds the parties to it”

3. FACTORS AFFECTING CONTRACT
Inequality of bargaining power
The standard form contract
Consumer protection

4. INEQUALITY OF BARGAINING POWER
Two parties bring with them differing levels of bargaining power

5. THE STANDARD FORM OF CONTRACT
Made by large companies
Consumers do not have the opportunity to negotiate
Example:
Customers of the electricity/gas companies

6. CONSUMER PROTECTION
Consumer interests served by consumer protection agencies
List two examples:

7. ESSENTIALS OF A VALID CONTRACT
Agreement
Consideration
Intention
Form
Capacity
Genuineness of consent
Legality

8. AGREEMENT One party accepts the offer of another EXAMPLE:
Purchasing a jumper from a shop

9. CONSIDERATION
Each side must promise to give or do something for the other

10. INTENTION
The parties must have agreed that their promise be legally binding

11. FORM A contract may be in any form (written, oral)
However, some contracts do have to be made in a particular form
EXAMPLE:
memorandum of sale (house)

12. CAPACITY Must be legally capable of entering into a contract EXAMPLE:
children and the lottery

13. GENUINENESS OF CONSENT
Must have been entered into freely ‘meeting of minds’
EXAMPLE:
cohersion

14. LEGALITY
Must not be illegal

15. VOID CONTRACTS A void contract is not a contract at all
No time has there been a contract at all between the parties
Any goods or money must be returned
Where items have been sold to a third party they may be recovered by the original owner
EXAMPLE:
HP agreement

16. VOIDABLE CONTRACTS Contracts founded on a misrepresentation EXAMPLE:
children playing the lottery

17. UNENFORCEABLE CONTRACTS
Valid contracts but cannot be enforced by the courts if one of the parties refuses to carry out its terms
Items received under the contract cannot be reclaimed
Only problematic if a dispute over the contract arises
EXAMPLE:
House purchase/ building regs

18. LIFE OF A CONTRACT
Once a valid contract has been formed, it remains in existence until it is discharged
Most common form is performance, where both parties perform their obligations and the contract comes to an end

19. Reading
You are to read and make notes on P.Richards; Law of Contract; 9th Ed; 2009 – pages

20. Cases
You need to investigate cases that apply to each of the essentials of a valid contract