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Contract law governs the terms and conditions of a legal agreement between two or more parties. Forming a contract is relatively simple.
To be a legally binding contract it must include four elements: William D King
Offer:
An indication by one party to another that they wish to enter into a contract with them. This can take the form of an advertisement, verbal statement, or written document. In order for this to be considered legally binding, there needs to at least be an intention by one party that they will be willing to enter into a contract with another should certain terms and conditions be successfully met? Example: I have just ordered some furniture from DFS online and in the checkout process, if I tick the box agreeing that I accept their terms and conditions then I have made an offer to enter into a contract with DFS.
Acceptance:
The indication by the other party that they agree to the terms of the offer. This needs to be communicated in some form, whether that’s verbal, written, or even inactions (e.g. if you order something and it’s delivered, you’ve accepted the contract). Example: I accept the contract offered by DFS by ticking the box agreeing to their terms and conditions during the checkout process.
Consideration:
This is simply something of value that is given by each party to the agreement. It doesn’t have to be money – it could be goods, services, or a promise to do something in the future. Example: In exchange for the furniture, DFS will send me a cheque (the consideration).
Mutual assent:
Mutual assent is when both parties accept that they will be entering into a contract with each other under the terms and conditions that have been offered. This happens once you click on the final button during checkout at DFS, and in this example, it has not yet happened until I’ve clicked on the final button.
To make your contract invalid or unenforceable – any of these four elements can cause issues if they are missing e.g. there’s no offer made by one party, or both parties don’t agree to all of the terms being offered by either party. If any of these are lacking, or if they contradict each other, this causes an issue and it will likely mean that there was no contract formed. For example:
I order furniture from DFS and agree to their terms and conditions but don’t receive a cheque for the payment I made for my new sofa. This would be considered a legally binding contract as I have offered and accepted the terms of the contract, so what is missing here? Consideration – I’m not getting anything in return for the money I’ve spent on the sofa. Without consideration, there is no mutual assent because both parties can’t agree to what’s been offered by either party e.g. DFS won’t send me a cheque without me first offering something in return (the money).
Contract law governs the terms and conditions of a legal agreement between two or more parties. Forming a contract is relatively simple. To be a legally binding contract it must include four elements: an offer, acceptance, consideration, and mutual assent (agreement). If any of these are lacking, or if they contradict each other, this causes an issue and it will likely mean that there was no contract formed.
To make your contract invalid or unenforceable – any of these four elements can cause issues if they are missing e.g. there’s no offer made by one party, or both parties don’t agree to all of the terms being offered by either party. For example:
I order furniture from DFS and agree to their terms and conditions but don’t receive a cheque for the payment I made for my new sofa. This would be considered a legally binding contract as I have offered and accepted the terms of the contract, so what is missing here? Consideration – I’m not getting anything in return for the money I’ve spent on the sofa. Without consideration, there is no mutual assent because both parties can’t agree to what’s been offered by either party e.g. DFS won’t send me a cheque without me first offering something in return (the money).
Conclusion:
In conclusion, whether you’re buying a sofa from DFS or signing up to a gym membership, always make sure you have read through the terms and conditions before clicking that final “I agree” button. If there is anything underlined/bolded/highlighted that you do not understand, don’t sign it! There may be information within those T&Cs that could mean this contract isn’t what you need or aren’t what you agreed upon – so take your time in reading them thoroughly before giving your consent says William D King.
If for any reason this blog has helped with an issue you are having in relation to contracts at work, please feel free to contact me & I will try my very best to help in any way possible.