A contract is a legally binding agreement between two or more parties in either writing or by word of mouth in which rights are transferred from one party to another (Carter, 1992). Therefore, for any agreement to be considered as a contract, there are elements that must be fulfilled. Considering a case study in which l bought a television set from an electronics supplier, the elements of a contract will be used to analyze if the purchase of the television set was a valid contract.
- Lawful Offer and Acceptance
A valid contract is initiated by acceptance of an offer. An offer is a deliberate attempt by a party to get into an agreement. An offer can therefore be extended to an individual, group of people or the whole world. The offer contains various terms, which must be accepted as they are for the contract to be valid (Carter, 1992). Thus, acceptance of the offer should be done on the initial terms only. Acceptance of the offer occurs by either a statement or an act.
The display of the television set on the shelves of the electronics shop with the price stated was an offer by the seller. The price tag represents the terms of the offer. As the buyer, therefore, I have the opportunity either to accept the offer or reject it but the moment l requested the sales assistant to deliver the television set at the sales point, it implied I had accepted the offer on the agreed terms.
- Intention to Create Legal Relations
The parties must intend to make the agreement legally in such a way that there will be legal consequences and obligations on the parties involved. The parties are therefore obliged to respect the rights of other parties in the contract and breach of the agreement leads to legal consequences (Taylor & Taylor, 2007).
The electronics supplier and I were obliged to adhere to the terms and conditions that were stipulated in the warranty card. The electronics supplier was obliged to respond to repair the television set in case of any fault and ensure the set was genuine. I was also obliged to ensure that l would not use any of the gadgets to produce any other copy as the brand was copyrighted. The breach of any of these agreements would breach the whole contract and lead to legal consequences, such as imprisonment, fine or compensation.
Agreements become valid only if there is a price attached to it. Consideration is therefore the price paid by a party in exchange for a given benefit received. Consideration may not necessarily be in monetary terms, but the benefit or loss must have some value (Carter, 1992).
The electronics supplier was the owner of the television set, therefore, in order for ownership rights to be transferred to me, I had to pay a price for it. I therefore paid $5000 as compensation to the supplier for the loss of losing ownership rights of the television set. The 5000$ paid was therefore the consideration in the purchase of the television set.
- Legal Capacity
The parties to a contract must be competent to enter a contract; otherwise, the contract is null and void. A party can only enter into a contract if the party is of majority age, sound mind, and must not be disqualified to enter into a contract by any law (Taylor & Taylor, 2007). This disqualifies minors, mentally impaired, and bankrupts from getting into a contract.
The electronics supplier and l had sound mind, were of majority, and did not face any case of bankruptcy in a court of law.
The parties involved in any agreement must enter into a contract in free will and proper understanding of the actions of the other parties thus the parties must have agreed on the same thing and on the same sense (Taylor & Taylor, 2007). Free consent is breached when there is mistake, coercion, duress, false statement or undue influence.
The contract for the purchase of the television set was agreed upon as the supplier of the electronics and l agreed on the same thing sense. I agreed to the terms and conditions and asked for clarity in areas l did not understand so that l could ensure the agreement was as l had understood. Therefore, my understanding of the agreement was similar to the suppliers’ understanding.
The sale of the television set to me was a valid contract as there was an offer by the seller of the electronics, and l accepted the offer by showing my willingness to buy it at the agreed price. We were both at legal capacity to create legal relationships that involved a consideration in terms of the $5000 that l paid to transfer the ownership to me. The contract was successfully accomplished and there was no breach of the contract.
Carter, A. T. (1992). Elements of the law of contract. London: Sweet and Maxwell.
Taylor, R., & Taylor, D. (2007). Contract law. Oxford: Oxford University Press