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Free Legal Advice on Contracts
So you want to write a contract? First you must consider the legalities before you create your contract. Most of the law noted below is implied law, meaning it is not written on the contract itself but is the rulebook essentially, of legal contractual practices, in this day of age.
Please note : a promisee is the person agreeing (customer) and the promisor is the seller.
English contract law regulates contracts formed in England. Its legal foundation is shared with many other countries including Australia, Canada and the United States. EU also affects the rules imbedded as the UK’s is a member of the European Union also so it is ever changing.
A contract is essentially an agreement between two parties that has to have an ‘offer’ and an ‘acceptance’ in order to be legally valid and enforceable. Consent is the main issue dealt with in contract law as if a contract is agreed wholeheartedly and legally then both the have to fulfil their duties, or obligations, otherwise they will have to remunerate or compensate the other party, at a figure set by the court or via ADR alternative dispute resolution, outside of court by a mediator or councillor or other suitable neutral 3rd party.
An offer is deemed valid if a party promises a price for example for a good or service. A major case is Carbill v Carbolic Smoke Ball Company whereby a unilateral contract can be formed by whole heartedly making a promise to everyone via an advert. In this case compensation for anyone who caught the flu once the product was used. Thus a is Unilateral offer is where 1 party promises to pay the other a sum of money (to do some other act) if the other will do something (or forbear from doing so) without making any promise to that effect (A promise in return for an act); An ‘if..’ contract – offer is a promise, the offeror is bound only if the specific act is performed.
This offer can be differentiated to Fisher v Bell whereby a flick knife was displayed in a shop window. It was an illegal size. However it was found it was only an ‘invitation to treat’ and thus only used to entice customers to come inside the shop. Notice the difference between this and Carlill, in Carlill money was deposited in a bank showing intention to compensate anyone who caught the flu therefore intention was found not merely entice customers to the shop but actually fulfil that promise.
Private (non business to business contracts) have been supported by the courts more and more as the average customer has weaker bargain power so unfair terms are sought to be voided and in land law tenants especially have good rights, as despite them not being legal owners they are the beneficiary and thus are the equitable owner of a property so are protected somewhat from landlords treating them unfairly both in practice and contract formation.
Acceptance is the main other branch that leads to an agreement. Essentially in private law a customer must say yes to a price.
However in more complicated agreements, acceptance has to be a final and unqualified expression of assent to the terms of an offer.
It must be communicated and until doing so the offer can be retracted under common law namely Powell v Lee (1908).
This can be done by the accepting party’s conduct i.e., by paying or commencing business if a valid offer is in place. This is under Brogden v. Metropolitan Railway Company (1877).
Silence cannot be acceptance, so if no response to an offer then that is deemed a non-binding contract under Felthouse v Brindely 1863.
Only the intended party (the offeree) can accept the offer made from he offeror.
Also a counter offer will destroy a previous offer. Thus in Hyde v Wrench a farm was originally offered at £1000. Hyde rejected this amount and offered £950. Then later Hyde wanted the sauce for breach of contract as he sold to another for £1000 and he was then willing to accept it thus forma contract. However it was too late as his counter offer of £950 legally destroyed the offer and thus the acceptance.
Also offers can time out by a duration of time, and also if they are accepted right up to the last minute. Thius is via the postal rule. The contract will stand upon evidence of intention to accept via post. Under Adams v Lindsell the moment the letter is posted it is deemed as accepted. Not received. It must be said this is someone dated nowadays due to technological advances but none the less is still legally valid.
Consideration is what the party will offer. This must have equitable value in order to be valid. See the law of contract page for more on this.
If there is a situation which arises where one or both parties attempt to rely on their standard terms this is known as the battle of the forms following the postage rule this is known as the battle of the forms and the winner is deemed as the party firing the ‘last bullet’ under Lord Denning’s judgement in British Road Services v Arthur V. Crutchley Ltd (19680 among others.
There are defences against formation. Lack of capacity whereby people aren’t deemed adequate to accept contracts; see more in law of contract tab.
Duress is whereby a party is put under unlawful pressure to enter into an agreement i.e. the accepting doesn’t consent. Undue influence is another contractually voidable pressure. This pressure is not unlawful but the agreement is again founded upon pressure by one party on another which puts that party in a disadvantageous position post formation. Or whereby trust was misplaced and this is seen as undue influence also, such as a parents or lawyer. Actual undue influence can include physical assaults in the case of Farmers’ Co-Op Executors & Trustees v Perks, a wife was unduly influenced to sign her half of her land to her husband whom had been violently domestically abusing her for a long time. He eventually murdered her, but the courts saw the contract as void.
Promissory estopple also defends the promissee from not receiving what was deemed to be his if there is significant deficit in reliance on a promise from a party. In this case Gillett v Holt a worker was Promised Land on the basis he stayed working for him but this was not awarded in the will. As there was sever detriment to the promisee it was found as a defence for the promise and the will was overturned.
‘Non est factum’, is another defence, whereby a party signs by mistake and thus the acceptance can be overturned.
It must also be noted there is a standard ‘cooling off period’ 2 weeks after signing a contract such a mobile phone for example where you can cancel contract legally.
If a person misrepresents themselves as a trustable character this is another defence that can be used to defeat contract agreement.
The death of the offeror can lead to termination of a contract. If the offeror dies before the offer is accepted, then the offeror’s personal reps may still be bound by an acceptance provided that:
The contract does not involve the personal services of the deceased or if the offeree is ignorant of the offeror’s death (Bradbury v Morgan 1862).
Furthermore the Death of the Offeree can also terminate the contract. If the offeree (accepting party) dies before acceptance, then the offer lapses & the offeree’s personal reps will be unable to accept on behalf of the deceased (Reynolds v Atherton 1921).
It is important to note that it is not advisable unless you have studied law to write your own contract. Always seek full and proper legal advise from a qualified and licensed legal professional.
See also: Law of Contract.