Mr. Lee 's A Bank Guarantee Over The Loan For The Vehicle Purchased By Their Son Lim

The principle of law is that for a valid contract to be formed there must be an agreement reached by both parties.

In this case, Success Assets Pty Ltd (Success) borrowed money from Statewest Credit Society Ltd (Statewest) to purchase land, and the land was mortgaged as security. The plaintiff entered into a guarantee in favour of Statewest which secured the loan and all future loans from Statewest to Success. Success used money borrowed from Home Building Society Ltd (Home) to pay the loan from Statewest. Statewest’s rights under the guarantee (which includes those relating to future loans) and Home’s rights under the were transferred to the defendant, Bank of Queensland (BOQ).

A contract is a legally obligatory promise or set of promises (Bagley, C. 2013). If this promise is broken, either party involved can be legally responsible and take the other party to court. There are four basic elements in the creation of a valid contract. The first consist of an agreement between the parties involved, by an presented offer and acceptance. The second states that the parties’ promises must be supported by something of worth, known as consideration. The third advises both parties must have the ability to enter into a contract. The fourth element states the contract must have a legal purpose (Bagley, C 2013).

Contracts are an important part of everyday life. They are an essential part of business. As a student of a business law class, I will discuss in this paper several aspects of contracts. This paper will give a definition of a contract and the essential elements necessary to form a valid contract. It will briefly discuss breach of contract and the difference between a material breach and a nonmaterial breach of contract. Examples of legal and equitable remedies available for breach of contracts will be highlighted. Also, legal excuses for nonperformance or other grounds for discharge of contracts will be addressed. Finally, three types of common contracts personally and professionally encountered will be mentioned.

A contract is a promise between two or more parties that the law recognizes as binding by providing a remedy in the event of breach. In order for a promise to be enforceable it must be supported by consideration. Consideration can be defined as a bargained for exchange between the promisor and promisee; a promise can not be considered a contract without consideration. Common law states also require mutual assent to exist for a contract to be enforceable, this means that there must be an offer and an acceptance of said offer. For example, if a promise is made between two consenting people and one of those

Letter of guarantee is a type of commitment from the bank on behalf of its customers (buyer) to the third party (suppliers) and Promises to meet any financial obligations in case the customers fails to fulfill the requirement of the contract. The risks that Wisconsin faced when they agree to accept the letter of guarantee and ship the goods under it includes currency risk, commercial risk, risk of nonpayment.

A contract is a legal document that states and clarifies a formal agreement between two different people or groups. This implies that an agreement between parties must have a strong backing by law. The following are therefore required for a contract to be mandatory for all participants involved. These elements in a contract prove whether the contract is regarded credible or not credible: The objective is to build a legal relationship, offer and acceptance, consideration, capacity to contract and legality.

A legal contract arises when there is an offer, acceptance of that offer and also a sufficient consideration to make the contact valid. There are five essential elements that make a contract legal and these includes;

A contract is simply an agreement which has legal value so that it is binding on both the parties, and each of the party can enforce it lawfully in case of any contravention of the terms of agreement. For an agreement to take the form of a contract, it is necessary for it to contain four essential components of a legally binding contract . These include,

A contract is an exchange of promises or a promise in exchange for performance, for breach of which the law gives a remedy, per Restatement 2nd of Contracts §1. For the contract to be valid there has to be mutual assent, parties mutually agree upon the same specific thing. Per Restatement 2nd of Contracts §54, there are two types of contracts: unilateral, where acceptance is by performance, and bilateral, where there is an exchange of mutual promises and both of the parties have the rights and duties.

Every contract is based on the concept of agreement. A contract is defined as a legal agreement consisting of exchange of promises which is recognized by law as giving rise to enforceable rights and obligations. The test of agreement is used to ensure whether or not there is a contract between the parties. Whereas the objective test ensures certainty, the same cannot be said about the subjective test of agreement. The objective test of agreement is when the court decides whether there is contract based on the outward appearance of what constitutes the contract. However the subjective test of agreement involves trying to establish whether there was a “meeting of minds” when the contract was made. That is, to try to figure out the mental state of mind of the parties involved during the time the contract was made.

Any legal contract must contain certain elements. First, it must contain an offer. The offer is what someone is going to do, such as lease you a tractor, sell you a guitar, paint your house, or simply pay you (The Basics of Contract Law, 2017). Second, the offer must be accepted. Acceptance means that you agree to what is offered, without any changes. (If you make changes to the offer, it is typically considered a “counter-offer.” which must itself be accepted) Third, it must represent the intent of both parties to enter into a legally binding agreement (The Basics of Contract Law, 2017). In other words, both parties have to be aware that the agreement could be enforced by law.

would give 100 £. The company then deposited 1,000 £ in a bank to show

Contractual agreements are supposed to be consensual, and freely entered into by the parties involved. Therefore, ‘before a court enforces a relationship as a contract, the courts must have a reasonably certain basis in fact to justify binding the parties to each other.’ (St. John’s Law Scholarship Repository, no date). Resolution of whether a contract was intended to be legally binding is not determined by what the parties themselves thought or intended. Rather, a more objective stance is taken by the courts. This is known as the objective theory of contract, and essentially enables ‘the courts to look at external evidence (what the parties said and did at the time)’ (Poole, 2006, p. 34), as to objectively indicate the parties’ intentions

Contractual agreement has always been viewed in terms of offer and acceptance. The universal principle to contract law has always been parties may get into an agreement in whichever way they deem fit and they are subject to certain terms as they choose. As far as legal requirements vital to their formation are binding contracts may be formed. Moreover a binding agreement may be manifested in terms of writing or in verbal form.