Law Binding Contract

1657 WordsSep 27, 20117 Pages
Task A Issue The main issue that needs to be addressed here is whether there is binding contract between the two parties, Baldcure Ltd. and Gary Knudenut, and consequently whether Gary can sue under that contract. Rule A contract is a legally enforceable agreement between two or more parties. To be valid, a contract must comprise of the following elements: - agreement (offer + acceptance) - intention - consideration - capacity to contract - consent - legality In order to establish whether there is a binding contract between Gary and Baldcure we need to consider the existence of these elements. One of the essential prerequisites of a contract (bilateral or unilateral) is agreement. Agreement…show more content…
Sub Issue 3 The issue that need to be considered further is whether there is an intention to create a legal relationship between Gary and Baldcure Ltd. Rule: In general, intention exists where can be demonstrated that there is an agreement. The law in this area requires an evidence of implied intention of the both parties to be bind by an agreement. (Pentony, 2003, p 57). Two presumptions need to be considered: - parties in commercial relationship intend to create a legally binding contract - parties in domestic or social relationship do not intend to create a legally binding agreement Balfour v Balfour (1919) 2 KB 571. Application: If we apply the law to the facts, the two parties, Gary and Baldcure have genuine consent to be in a commercial relationship. Conclusion: To conclude, there is a commercial relationship between Gary and Baldcure Ltd and therefore applies the presumption that they intended to enter into a binding agreement. Sub Issue 4 The next issue is the existence of consideration by Gary and Baldcure Ltd. Rules Consideration is defined as “an act of forbearance, or the promise thereof which is the price paid for the promise of another, and the promise thus given for

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