SelLecture 5 - 2010 - CONTRACT LAW ESSENTIALS OF A CONTRACT...

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CONTRACT LAW - ESSENTIALS OF A CONTRACT Lecture 5
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ESSENTIALS OF A CONTRACT For there to be a valid contract, 4 elements need be present: If any 1 element is missing, there will be no valid contract.
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OFFER Offer: Offering to do something - with a clear intention of being bound should the other party accept. Eg: X offers to sell his TV to Y for $200. If Y agrees, can Y insist on X selling him the TV? Note: Offer must be distinguished from invitation to treat under which - there is no clear intention of being bound . Eg: If X rings up a store to find out how much a particular model of a TV costs and the shop assistant replies that it costs $2000, is X’s inquiry an offer? Is the shop assistant’s reply an acceptance? Can the shop legally insist on selling the TV to X?
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ITT - Advertisements Advertisements are generally invitations to treat. What is the reason?
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ITT – Display of Goods Display of goods in a shop is usually an invitation to treat. What is the reason?
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ITT - Tenders When a business calls for a tender, that is usually an invitation to treat. Why is this so?
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Termination of Offer Once an offer is made, it may not be valid for forever. If an offer is no longer valid, it cannot thereafter be accepted. Some ways in which an offer may become invalid/terminated are as follows: Ø An offer may be terminated by withdrawal before acceptance, Ø An offer may be terminated by a counter-offer , (Eg: X offers Y his racket at $30; Y says he will pay $25; X refuses and later sells it to Z; If Y subsequently offers $30 for that racket – will X be in breach of contract?)
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ACCEPTANCE For acceptance to be valid, it must be on the same terms of the offer. Communication of acceptance: Ø For the acceptance to be valid, must it be communicated to the offerer? Ø Can the offerer state that he will treat the offeree’s silence as amounting to acceptance? Ø However, note there are exceptions to the above two rules; eg: both parties agree otherwise.
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What if acceptance is sent but not received? The general rule is that acceptance is
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This note was uploaded on 11/01/2011 for the course BIZAD BSP 1004 taught by Professor Ravichandran during the Spring '11 term at National University of Singapore.

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SelLecture 5 - 2010 - CONTRACT LAW ESSENTIALS OF A CONTRACT...

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