Definition

1. A contract is a legally binding agreement.
2. It does not necessarily have to be written, signed or witnessed.
3. Verbal contracts can also be legally binding.
4. For a contract to be legally enforceable, several key elements must be present.

Offer

1. The first stage in forming a contract.
2. The person making the offer = offeror.
3. The person receiving the offer = offeree.
4. An offer must:
   • Be firm.
   • Have clear and certain terms.
5. Unclear terms may prevent a legally enforceable contract from being formed.
6. Exemption clauses must be brought to the other party's attention before the contract is formed to be enforceable.
7. An offer can normally be withdrawn before acceptance.
8. Withdrawal after acceptance may result in a breach of contract.

Acceptance

1. Acceptance is the offeree's agreement to the terms of the offer.
2. Acceptance must correspond with the terms of the offer.
3. It can be communicated:
   • Face-to-face.
   • By telephone.
   • By fax.
   • By email.
   • By post.
4. Where post is used, acceptance is complete when it is posted.

Consideration

1. English law generally enforces bargains rather than bare promises.
2. A promise normally needs consideration to be enforceable.
3. Consideration means a benefit/value exchanged between the parties.
4. Example:
   • Transport operator provides carriage.
   • Customer provides payment.
5. Consideration does not necessarily have to be fair or equal.
6. Both parties must provide some consideration.

Capacity

1. Parties must have the necessary contractual capacity.
2. Certain people have limited or no contractual capacity, including:
   • Minors under 18.
   • Persons of unsound mind.
3. A company's capacity was described in the notes in relation to its objects clause.

Intention

1. The parties must intend to create a legal relationship.
2. Without this intention, there may only be an agreement and not a legally enforceable contract.

Legality

1. The contract must not involve:
   • An unlawful purpose.
   • Unlawful means of carrying it out.
2. An unlawful agreement is unenforceable.

Breach of Contract

1. Once a valid contract exists, failure by one party to perform their obligations can result in a breach of contract.
2. The injured party may sue for financial damages under civil law.
3. Claims can begin in:
   • County Court.
   • High Court.
4. Appeals can ultimately reach the Supreme Court.