Ask any one you know to describe a contract, they will mention paperwork that you sign when you start a job or college, renting or buying a house. These are contracts, but in the law this term has a much wider meaning, covering any legally binding agreement, written or not written. We make contracts when we buy goods at a shop and when we get a bus, sometimes it is made without a word being spoken or written down. A contract is,
"An agreement which legally binds the parties", (BBP Common Law 1, 2004).
More than a handshake it is an intention to create a legal relationship.
(Painter and Lawson, 1989).
A contract should indicate there has been a 'consensus ad idem', - meaning a meeting of the minds between people concerned. For the contract to be bonding it is necessary that one party makes a firm offer then it is accepted unequivocally.
This essay will discuss the essential elements of the formation of a legally binding contract. The significance of specific terms used in business contracts will be explored, relevant important cases will be used to explain how a contract is formed and what the specific terms mean. Using the case study, Draker Ltd. examples will be given of how this large engineering company could be affected.
Types of Business Agreements -There are different types of agreements,
Unilateral- one person performs obligations. (e.g. a reward for a lost dog).
Bilateral- both parties have duties to perform under the contract.
Speciality contracts - formal contracts- usually done by deed, these must be done in writing, (e.g. a will).
Standard contracts- these are forms commonly used business, (e.g. invoices, bills of sale and JCT80).
Simple Contracts- this is a basic way to contract...