Business Law Assignment
Contract
By definition under Sec 2(h) Contract Act 1950, “an agreement enforceable by law is a contract”. A contract is a promise or agreement between two or more parties that is enforced by law to be legally binding. It may involve a duty to do or refrain from doing something, and the failure to perform such duty is a breach of contract. The role of law in a contract is not to punish the breaching party but to provide remedies to restore the person wronged to the position they ought to occupy if the contract had not been breached.
To distinguish contracts from other types of promises and agreements, 6 vital elements have been established that are necessary for a contract to exist and they are Offer, Acceptance, Consideration, Intention to create a legal relationship, Capacity and Certainty. A contract is only legally binding once the elements are in existence. Absence of any of the elements in a contract will be void or voidable.
Offer
According to Section 2(a) Contracts Act 1950, an offer or proposal is made “When one person signifies to another his willingness to do or abstain from doing, with the view to obtaining the assent of that to the act or abstinence, he is said to make a proposal”. Example, Jeff proposes to sell his van to Kim for RM20, 000. This makes Jeff the offeror and Kim the offeree.
An offer need not be made to a specific person. It may be addressed either to an individual, or to a group of persons, or to the world at large, and may be made expressly or by conduct.
a) A particular person: Jeff went to Kim’s shop and is offered to buy a pair of shoes. Kim’s offer cannot be accepted by Rony who owns a shoe shop nearby because Rony was not the addressed person in the offer. Furthermore, Section 2(b) Contracts Act provides that “…when a person to whom the proposal is made” which appears to say that only the addressee may accept the proposal.
Boulton v Jones (1857) 2H & N 564
Defendant had business dealing with a shopkeeper named
By definition under Sec 2(h) Contract Act 1950, “an agreement enforceable by law is a contract”. A contract is a promise or agreement between two or more parties that is enforced by law to be legally binding. It may involve a duty to do or refrain from doing something, and the failure to perform such duty is a breach of contract. The role of law in a contract is not to punish the breaching party but to provide remedies to restore the person wronged to the position they ought to occupy if the contract had not been breached.
To distinguish contracts from other types of promises and agreements, 6 vital elements have been established that are necessary for a contract to exist and they are Offer, Acceptance, Consideration, Intention to create a legal relationship, Capacity and Certainty. A contract is only legally binding once the elements are in existence. Absence of any of the elements in a contract will be void or voidable.
Offer
According to Section 2(a) Contracts Act 1950, an offer or proposal is made “When one person signifies to another his willingness to do or abstain from doing, with the view to obtaining the assent of that to the act or abstinence, he is said to make a proposal”. Example, Jeff proposes to sell his van to Kim for RM20, 000. This makes Jeff the offeror and Kim the offeree.
An offer need not be made to a specific person. It may be addressed either to an individual, or to a group of persons, or to the world at large, and may be made expressly or by conduct.
a) A particular person: Jeff went to Kim’s shop and is offered to buy a pair of shoes. Kim’s offer cannot be accepted by Rony who owns a shoe shop nearby because Rony was not the addressed person in the offer. Furthermore, Section 2(b) Contracts Act provides that “…when a person to whom the proposal is made” which appears to say that only the addressee may accept the proposal.
Boulton v Jones (1857) 2H & N 564
Defendant had business dealing with a shopkeeper named
References: E-Law Sources (2008) Contract Law. Accessed October 14, 2012 from http://www.e-lawresources.co.uk/Contract.php Wikipedia (Online Free Encyclopedia). Accessed October 14, 2012 from http://en.wikipedia.org/wiki/Contract Smith, C. (2010). Acceptance defined. Accessed October 10, 2012 from http://www.west.net/~smith/acceptance.htm Ollek, S. (2010) Essentials of a contract. Accessed October 10, 2012 from http://www.e-law.bc.ca/art_essential.html