What does serious and commercial mean and what does it prevent?
It means casual/joking commitments are not given legal status as it prevents law being drawing into silly personal agreements.
What are the 6 elements of a contract?
1) It must be serious and commercial
2) Offer/Exchange of the terms should be present
3) Exchange of something of value must occur
4) People have the capacity to understand the contract
5) Consent must be freely given
6) The activity must be legal
What is a contract?
It is a agreement between two or more people/businesses that creates rights/duties for the parties to follow that is legally enforceable.
What does offer and acceptance mean?
It means all parties must agree to the terms of the contract specifically the rights/duties of each part.
Does a promise/agreement make something a contract?
No simply a agreement/promise doesn’t make something a contract.
How can offer/acceptance be made?
It can be made verbally, by actions or in writing.
What is exchange ( consideration )?
People in contracts must exchange something of value
What does capacity mean in a contract?
It means the people in a contract must have the capacity to enter the contract. ( Mental ability, non intoxicated, over age etc)
What are the unfair advantages which are the consequences of non capacity
1) Unfair advantages
2) Inability to understand the rights and complete contractual duties
3) A third party may be unfairly required to complete the contract
4) Inability to understand the consequences
What does consent freely given mean?
It means people must give their consent freely and they intend/desire to enter the contract.
What are the unfair forms to obtain consent?
1) Threatening behaviour
2) Blackmail
3) Undue influence
What is Undue influence?
It means persuading another person to do something just because of a special relationship between them.
What is the last element of a contract?
It is that the activity must be legal.
What happens if any of the 6 elements are not present in a contract?
It means the contract is not legally enforceable, invalid and ultimately voidable
