Contract Law

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General Introduction For parties to be bound by an agreement, it must first be determined if a prima facie valid and enforceable contract exists. A contract can be defined as an agreement containing promises made between two or more parties with the intention of creating certain legal rights and obligations and enforceable in a court of law [1]. For a legally binding contract to exist the following elements must be satisfied: 1. An offer must exist 2. The offer must be accepted 3. Consideration must pass between the parties 4. The parties must intend the agreement to be legally binding 5. The parties must have the legal capacity to enter into a contract 6. The contract cannot be for an illegal…show more content…
In applying this case, the offer made by Boris would terminate the original offer. Therefore, Michael’s response constitutes a counter-offer not an invitation to treat. Another matter for legal consideration is whether Boris accepted the counter- offer and if the method of acceptance was legally binding. An acceptance converts the promise of the offeror into an agreement[6]. The acceptance by Boris to Michael’s counter-offer contained two key elements: ← A willingness to take what was exactly offered (i.e. the sale of the car); and ← An agreement to pay the price required (i.e. $800). The facts presented clearly indicate upon receipt of Michael’s letter, Boris accepted the offer and promptly replied by post creating a simple, bilateral contract – ‘a promise for a promise’. The exchange of such promises creates an enforceable contract. In contract law, the offeror can establish the method of acceptance and the acceptance must comply with the requirements in the offer before an agreement is completed. The facts provided indicate, Michael as offeror, failed to prescribe any method of acceptance. There is an assumption that if no method of acceptance is prescribed, acceptance is to take the same form as the offer[7]. Given Boris replied by the method of offer, being post, it can be concluded that Boris complied with the method of acceptance by posting the letter of acceptance. Having determined there

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