Contracts And Contracts Of Contracts

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Introduction We enter into contracts every day. Taking a seat in the taxi amounts to entering into a contract. You go to a bar to drink some beers, you have entered a contract though we might not realise that we have entered into a contract. In the commercial world services and goods are normally purchased for resale or consumption. Usually the buyer and the seller will negotiate the terms of the purchase before they enter a transaction which will result in the sale. Trading involves financial risk therefore it is in the interest of all to have recognizable set of rules by which each party agrees and abides to. All business naturally deal with contracts, these contracts can either be unwritten or written. A contract is a legally binding…show more content…
To create a contractual relationship both parties must intend their agreement to have legal consequences. Cases where parties of the agreement have not clearly expressed their intentions it will be left to the courts to judge whether they intended to get into a contract. An agreement of a purely social or domestic nature is not a contract. A good example is the Balfour v. Balfour (1919) case whereby the husband agreed to pay £30 to his wife every month while he was abroad. As he failed to pay the promised amount, his wife sued him for the recovery of the amount. The court held that she could not recover it because it was social agreement and the parties did not intend to create any legal relations. Nonetheless, even in the case of agreements of purely social or domestic nature, there may be intention of the parties to create legal obligations. In such cases the social agreement is intended to have legal consequences which results in a contract. In commercial and business agreements the law will presume that the parties entering into agreement intend those agreements to have legal consequences. A contract may be oral or in writing. If a certain type of contract is required by law to be in writing, it must comply with the necessary formalities as to writing, registration and attestation. If these legal formalities are not

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