BLAW10001 Chapter Notes - Chapter 4: Contract, Peer Pressure, Estoppel
15 May 2018
School
Department
Course
Professor
Principles of Business Law
• Tutorial 4
• Week 4
• Making a Contract
• Distinguishing contracts from other agreements
• A contract is an agreement between two or more persons (called parties) which is
legally enforceable because it meets certain requirements
o Means if one contracting party does not do what they promised, other party
can bring a legal action and ask the court for appropriate remedy
• Three elements of contract formation
o An intention to create and take on legally binding obligations
o Either formal execution of the agreement in a deed or, as an alternative, the
ehage of soethig of alue the paties he the otat is ade
o Agreement between the parties on at least the essential aspects of their
transaction
• Intention to be legally bound
• Parties may intend that the performance of an agreement will rely only on notions of
honour, goodwill, affection, mutual advantage, or peer pressure
o Do not intend to be legally enforceable
• Sometimes people enter agreements that have legal consequences
o Called a contract
o Intention of parties to be legally bound by contract
• Agreements made in a commercial context tend to be legally binding
• Agreement made in writing
• Suggestive of an intention to be legally bound but no conclusive on the matter
• Agreement is clearly worked out and includes many details
• More likely it is that parties intend it to be binding
• The transaction has serious consequences for one or both parties
• Parties probably want the agreement to be legally binding
• Word contract is used to describe the agreement
• Signifies an intention to be legally bound by agreement
• Formal execution or exchange consideration
• Deed
o Signed and sealed by its maker
o Must be witnessed by someone who is not a party to the agreement
• Informal agreement
o Involves a bargain or exchange between parties
• Consideration
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