Contracts and Negligence in Business: Offer, Acceptance, and Liability, Lecture notes of Contract Law

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ASPECTS OF CONTRACT

AND NEGLIGENCE FOR

BUSINESS

Lecturer: Judith Robb-Walters Lesson 4

• ASPECTS OF CONTRACT AND

NEGLIGENCE FOR BUSINESS

• LO 2: Be able to apply the elements of

a contract in business situations

• September – November 2014

LEARNING

OBJECTIVES

• At the end of the class, students should be able to:
  • apply the elements of contract in given business scenarios.

OVERVIEW

Individuals and businesses form contracts all the time. Despite what many people believe, contracts do not all need to be written and signed documents. Many valid contracts involve no written or spoken communication at all, for example where a person buys something from a shop. The first requirement for a valid contract – agreement, which consists of an offer and acceptance of the offer. The rules concerning when offers can be terminated and how acceptance should be communicated are vital knowledge as to whether or not a valid contract exits. ACCA F4 Corporate and Business Law

INTENTION TO CREATE

LEGAL RELATIONS

• Michelle and Mark are planning to divorce. They have spent their married life in an apartment which they bought in their joint names, with the help of a mortgage which has six years still to run. Michelle and Mark agree that Mark will move out of the house, and if Michelle meets the mortgage payments repayments for the next six years, Mark will , at the end of the time, transfer sole ownership of the house to her. Michelle pays the mortgage for a year, at which point Mark says he has changed his mind, and does not intend to transfer his share of the house to her.
• Advise Michelle. How, if it all, would your advice differ if Mark had changed his mind before Michelle had started paying the mortgage.

CONSIDERATION

Pauline has bought herself a new car. Rohan

had been her gardener for many years. She

told him that as he had done such a good job

in the garden that summer he could have her

old car. Rohan was delighted and sold his old

car. Using the money from the sale of his old

car he orally agreed to take out a four lease

on a flat. The next week Pauline changed her

mind and refused to give Rohan the car.

Discuss

PRIVITY OF

CONTRACT

• In relation to the law of contract explain the meaning and effect of:-
• (a) The doctrine of privity
• (b) The intention to create legal relations

Further readings

• The law of obligations 4 : Formation of contracts I ACCA BPP F
• Contract Law - Catherine Elliott and Frances Quinn