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Explain the factors for formation of a contract.

      

Explain the factors for formation of a contract.

  

Answers


Ruth
-The Offer:
An offer is defined as an expression of willingness to enter into a contract on definite terms, as soon as these terms are accepted. It is made by a person known as the offeror and addressed to the offeree. Thus, if A writes to B stating his desire to sell his property to B at a specified price, A is said to have made an offer to B. A is the offeror and B the offeree. An offer may be express (where the offeror specifically makes his intentions known to the offeree, whether in writing or by word of month), or it may be implied from the conduct of the parties, particularly the offeror. An offer is valid only if its terms are definite, but not where they are vague.

-The Acceptance:
An acceptance is an assent to the terms of an offer. It must correspond with the terms of an offer, and it is for this reason that a counter offer, cross-offer or conditional assent is not an acceptance in the legal sense of the word. An acceptance may be made in anyway that is expedient, but sometimes the offer itself may dictate the mode of acceptance. For example, the offeree may be required to notify his acceptance in writing or to lodge it at a named place or to a named person, or to communicate it within a specified period of time, e.t.c. Generally, the prescribed mode of acceptance must be adhered to; it is only in exceptional circumstances that an equally reflective mode of acceptance may be upheld. An acceptance may be express (where the offeree directly assents to the terms of the offer), or it may be by conduct.

-Consideration:
The offer and acceptance are not enough to bring about a valid and binding contract. In the case of simple contracts, these are required to be supported by consideration, otherwise the contract is void. Specialty contracts are an exception.

-Intention to Create a Legal Relationship:
A contract apparently supported by consideration will not result in a binding contract unless it was the intention of the parties to enter into, or create legal relationship. It, for example, X, promises to take out Y for lunch and Y accepts ad patiently waits for X, there is no legally binding agreement and Y cannot sue X failure to honour his promise.

-Contractual Capacity:
An essential ingredient of a valid contract is that the contracting parties must be ‘competent to contract’. Every person is competent to contract who is of the age of majority and who is of sound mind, and is not qualified from contracting by any law. Only a person who has contractual capacity be a party to a contract. This includes artificial as well as natural persons.
NatalieR answered the question on May 11, 2022 at 11:06


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