Understand the Legal Requirements for a Valid Contract

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Assignment 1 – Understanding the legal requirements for a valid contract The essential elements for a contract, who apply in all cases, are: 1. Offer- made by offeror to the offeree , it is very important to distinguish this from invitation to treat ( which invites offers to be made) 2. Acceptance – Offeree accepts the offer that has been made. Rolls Royce Car 3. Consideration- Something of value passes between the two parties e.g.: A B Bag of Marbles 4. Intention to create legal relations – Domestic/ social agreement: not legally binding…show more content…
This mistake of a contract assumption could have been avoided if Elliot had made a more detailed offer in which he could have mentioned that he will be expecting a response from Vicky before any assumptions could be made, rather than assuming that silence means acceptance. In this case the postal rule does not apply as there was no answer sent to Elyot regarding his offer, therefore the casus could have been avoided if Elyot had stated that “further actions shall come in power after a written response is received”. Task 2 Sarah wanted to buy Beth’s business. After some weeks of negotiations Beth wrote to Sarah saying: ‘Following our discussions I am prepared to offer you my business for £80,000 and I will give you a week to consider this’. After 2 days Sarah replied by telegram saying: ‘Would you accept £65,000 down and the balance over one year?’ On receipt of this telegram Beth immediately sold her business to Luke. On the same day Luke told his friend Velko of his purchase and he told his girlfriend who told her friend Sam who told Sarah. Sarah then immediately wrote and posted a letter to Beth accepting the original terms. This letter was lost in the post. The Postal rule is a rule of contract law that makes an exception to the general rule that an acceptance is only created when communicated directly to the offeror. An acceptance is binding and the contract is said to be perfected

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