Theory question 104
Law of ContractCommerce 2 (answer five questions)
'Business relationships are deeply rooted in the law of contract'
(a) What is a contract?
(b)(i) State the essential elements of a valid contract (ii) Briefly discuss any three of them
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(a) A contract is an agreement between two or more parties that the law will enforce, creating legal rights and obligations.
(b)(i) Offer; acceptance; consideration; intention to create legal relations; capacity of the parties; legality of object; genuine consent (free agreement); possibility of performance; certainty of terms; form where required by law.
(ii) Any three discussed, e.g.: Offer and acceptance – one party makes a definite offer and the other accepts it unconditionally; a counter offer is a rejection. Consideration – each party must give something of value in return (price, goods, a promise). Capacity – parties must be legally able to contract (not minors, insane or drunk persons). Legality – the object must be lawful. Intention – both must intend the agreement to be legally binding (not a social arrangement).
List the elements, then explain three in detail.