This document defines contracts and their key elements. A contract is a legally binding agreement between two or more parties, either orally or in writing. The essential elements of a contract are: offer, acceptance, consideration, capacity, legality, and intention to create a legal relationship. An offer is a proposal to enter a contract. Acceptance must not change the offer's terms. Consideration refers to the value each party provides. Intention to create a legal relationship is assumed when consideration is exchanged. Capacity refers to a party's legal ability to enter a contract. The document provides examples and cases to illustrate these contract elements.

1. Contracts
Simple contracts

2. Objectives
At the end of the class you should be able
to:
O Define the term contract
O Accurately describe the elements of a
contract covered in class
O Accurately apply the elements of a
contract covered to given cases.

3. Definition
OA contract is an oral or
written legal binding
agreement between two
or more parties.

4. Characteristics
OOffer
OAcceptance
OConsideration
OCapacity
OLegality
OIntention to create legal relationship

5. Characteristics
O Possibility
O Genuineness of consent

6. Offer
O This is a proposal or bid made by one
person to another
O e.g. Stacy I am selling my car for $5,000
do you want to buy it.

7. Your Turn
OOn your own create a simple
scenario that shows an offer

8. Offer Rules
OCan be: oral, written or implied
O If it is made by post it is effective
once it reaches the offeree (NOT
when it is posted)
OCan only be withdrawn before
acceptance

9. Invitation to treat
OInvitation to come and make an
offer
OEg. Goods being displayed on
a shelf in a store
OAdvertisements in news paper

10. CASE A
O Partridge v Crittenden [1968] a man was
arrested and charged for advertising for
sale in a newspaper “protected birds”
O What do you think happened?

11. Answer
OCase thrown out as a display is
not seen as an offer

12. CASE B
O The following Ad. Appeared in a
newspaper.
I will offer for sale at a
public auction for 2014
Honda CRV
November 3, 2016
Macy saw the
advertisement and drove
to the venue. She was
disappointed to hear that
the vehicle is no longer
being sold
she threatened to sue as
she accepted the offer
that was made

13. ACCEPTANCE
O A full and complete approval of the terms
of the offer. This must not alter the original
offer in any way.
O Any change in the original offer is a
counter offer.
O A counter offer REJECTS
the original offer

14. Acceptance
O Must be made the in the way that the
offeror asked.
O If by post it is effective when it is posted.
Not when it is received
O Silence does not mean consent.

15. Case C
O Andrea has a phone selling for $4000,
Justin has shown some interest in the
phone and sent Andrea this message
O “I am interested in buying the phone you
have. If I do not hear back from you by
Tuesday I will deem it a yes and post the
money to you.”
O Andrea sold the phone to someone else
and Justin is threatening to sue

16. Consideration
O This refers to the item of value given up
by each party for the contract. Each party
must make a sacrifice in return for the
benefit of the contract
O Mart offered Allison $200 for a pen she
has. She accepted his offer
O the $200 represents Mart’s consideration
and the Pen which Allison gave up was
her consideration

17. Intention to Create Legal
Relations
OThis is very important to a contract
as it is assumed social
arrangements have no intention to
create legal relationships. When
consideration is involved on both
sides (especially money ) then
intention to create legal relations is
assumed

18. Capacity
O This speaks to the person’s legal ability to
enter into a contract this is normally in
relation to
O Age
O Mental ability

19. Wrap up
O A contract is _________________
O An offer is ___________________
O What is a counter offer _____________
O What effect does the counter offer has
O Can silence mean consent

20. Case D
OSue offered Mark her car to be sold
for $200 Mark responded by saying
yes he wanted the car but he would
buy it for $150. Mary comes by
while they were talking and said she
was willing to buy the car for 200,
Sue gave up the keys and accepted
the money. Mary is threatening to
sue

21. OCreated by P. Bowen