This document discusses how contracts are formed and some key constraints on an organization's ability to enter into contracts. It defines a contract as an agreement between two or more parties that is recognized by law and enforceable in courts. The five essential elements of forming a contract are: offer, acceptance, consideration, intention to be legally bound, and certainty of terms. It also outlines what does and does not constitute a contract, constraints such as an organization's status and powers, and implied contract terms.

1. Forming a Contract & Incorporating
Contract Terms
Owen Evans, Associate
Wednesday 16th May 2012

2. Objectives
• Try to demystify contracts
• Help you to understand the contract formation
process
• Highlight some key legal constraints on the ability
of organisations to enter into contracts

3. Framework
• What is a contract?
• 5 essential elements
• Constitutional ability to contract

4. What is a Contract?
• An agreement
• Between two or more parties
• Recognised by law
• Enforceable through the courts

5. What is a Contract?
No set form
• Written (eg via exchange of emails)
• Oral (eg on the telephone or at a meeting)
• Implied by conduct – course of dealings

6. What is not a Contract?
• Heads of terms
• Memoranda of understanding
• Letters of intent
• … unless states they are legally binding

7. How is the Contract made?
Five essential elements:
• Offer
• Acceptance
• Consideration
• Intention to be legally bound
• Certainty of terms

8. How is the Contract made?
Offer
• What is an offer?
• Offer .v. Invitation to treat?
• Form of offer
• Withdrawal of offer

9. How is the Contract made?
Acceptance
• What is acceptance?
• Acceptance .v. Counter offer?
• Form of acceptance
• Communicating acceptance
• Timing

10. How is the Contract made?
Consideration
• Money or money’s worth
• Does not have to be adequate
• No past consideration

11. How is the Contract made?
Intention to be legally bound
• Presumption of intention
• “Subject to contract”
• Sports Network Ltd v Calzaghe (March 2009)

12. How is the Contract made?
Certainty of terms
• Express and implied terms
• Agreements to agree
• Agreements to negotiate in “good faith”

13. How is the Contract made?
Implied contract terms
• Services – reasonable care and skill
• Goods – title / description / satisfactory quality /
fitness for purpose / sample

14. Ability to Contract
• What is your status?
• Within scope of charity’s objects and powers?
• Who are authorised signatories?

15. Thank You

16. Contact Details
Owen Evans
DD : 029 2039 1850
owen.evans@geldards.com