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Contract Law

Contract is an agreement between two or more persons which defines their rights and obligations and is legally enforceable. This means that once the agreement is not followed, the law of the land takes its course and persons involved are under obligation of the law. A contract to be true and enforceable, it must have the following elements:
A contract must have a lawful offer. It means that lawful offer must be made by an offerer to an offeree. An offer is expression of the willingness to contract on the properly defined and definite terms once they are offered. In this case law Martin gives an offer to Jim. This offer to work for him as a bricklayer is a lawful offer.

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There must be a lawful acceptance. This means that an offer made by an offerer must be accepted by an offeree. This is a manifestation of the offeree’s intention to contract on definite terms with an offerer. It must be clear, and once it is made, a contract exists there on. Jim accepts to work for Martin, provided he is paid.

There must be a lawful consideration. Consideration is the price for which the promise of the other is being bought. It is one thing in exchange for the other, “quid pro quo”. It means that the law of contract does not support empty promises. On the issue of the lawful consideration, Jim is given 30 pounds per hour which he accepts at first.

It must also be done by free consent. This means that parties to the agreement are to contract freely and willingly without any external pressure. Free consent does not possess any vitiating factor. That is illegality, misrepresentation, duress, coercion and undue influence. Nobody has pushed Jim into accepting the offer given by Martin and therefore through this it is qualified to be on free consent.

Another factor that must be there for the contract to be valid is that the parties involved must all have a contractual capacity. In the above case law the parties involved have both capacities to contract. This means that the parties must not have insanity, bankruptcy or be of minority age. The parties involved must have a unity of mind (consensus ad idem). This means that the parties involved must be clearly understood. In short, it means that the parties must understand each others’ intention to contract. This element is important as it eventually forms privity of contract which is of key importance. However, it is only that is done or said which shall form these elements and not a person’s inner thoughts. Martin and Jim have both agreed into the contract and neither of them can complain of being forced into it and therefore, they are in the unity of mind.

The major aspect of the law of contract is that the parties must have an intention to create legal relationship. This means that the parties involved must have intended to create a binding legal relationship, hence social and domestic transactions are not included. Martin and Jim had the intention to create a legally enforceable relationship. Jim enters into a contract with Martin and even reports to work. This means that a contract is legally binding.

In the first case law, where Martin is seeking to pay or not to pay the extra £20 per hour, as there is a counter offer. A counter offer is a reply to the original offer with an intention to change the terms of such an offer. The legal effect is that a counter offer extinguished the original offer and then becomes a new offer like in the case of “Hyde vs. Wrench”. In Martin’s case, three days after the start of the work a counter offer was presented by Jim. However, Martin agreed to the counter offer. This, in turn, extinguished the original offer. I would advise Martin to pay Jim extra £20 per hour since it is enforceable by law. The fact is that Martin agreed to pay Jim extra £20 per hour, though on condition to complete the work makes it enforceable by law.

In the second case the doctrine of estoppel shall be applied. This is one of the principles under which the law of evidence is applied and it is the doctrine that governs unfulfilled promises. It is also referred to as the promissory estoppel, equitable estoppels or the rule in the high trees case. Under this rule a person who gives an express or implied promise to pay consideration for something which was done in the past shall be bound to fulfil such a promise. “Where a promisor makes a promise and the promisee relies on it and acts the promisor shall be stopped from denying that he made the promise”. Martin is a loyal customer of Lee who sells timber to him. Due to this and prevailing financial difficulties, Lee has agreed to be paid £1,500 and therefore Martin does so in January. Lee had said to Martin to pay and that would be the end of it. Martin pays £1,500 in January and therefore it should be the end of it. Lee, therefore, should be stopped from denying that fact. I would advice Martin not to pay Lee extra £500. This is because Lee would not succeed in recovering money from Martin.

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