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Chapter 2
Unit 1- Definitions
| Term | Definition |
|---|---|
| A contract | A legally binding agreement between two or more parties in business that can be enforced in a court of law. |
| The law of contract | A law which sets out the rules for proving when a contract exists and when it is finished/ terminated. |
| Offer | The starting point of any negotiations where one party says to the other that they intend to buy from them. This can be done verbally, in writing, or by conduct. |
| Acceptance | Where the other party agrees to all the terms of the original offer. This can be done verbally, in writing or by conduct. |
| Consideration | What each party offers the other as evidence of their agreement. This is something of value, usually money. |
| Intention to Contract | The parties in the agreement must have intended to create a legally binding contract that could end up in court if not fulfilled. All business agreements, are intended to be legally binding. All social and private ones aren't intended to be legaly binding |
| Consent to Contract | Each party must give genuine agreement of their own free will to the making of the contract. If a person is pressurised against their will to enter the contract, it is non existent. The same is said if a contract is entered due to dishonesty. |
| Capacity to Contract | The people agreeing to the contract must have the legal right to do so. Anyone under the age of 18 (except normal purchases ie food), anyone intoxicated, insane or unsound mind or a company acting ultra vires don't have the legal right to enter a contract |
| Ultra Vires | When a company is acting outside its memorandum of association (its legally stated purpose) |
| Legality of Form | Means certain contracts must be drawn up in writing before they can become legally binding. |
| Legality of Purpose | For a contract to be legally binding it must be for a legal purpose and not involve committing a crime or breaking the law. |
| Warranty | A non-essential element of a contract. If a warranty is broken you are entitled to compensation, although the contract is still valid. |
| Specific Performance | Getting the court to order the other party to keep their side of the agreement. |
| Invitation to Treat | A way of trying to intice consumers to make an offer which the shop can reject or accept, it is not a contract. EG: goods on display in a shop, price tag. |
| Caveat Emptor | Legal term meaning 'let the buyer beware" |
| Unsolicated Goods/Inertia Selling | Where goods are sent to people through the post which they never ordered, for which retailers seek payment. |
| Leglislative manner | Using the law or an institution set up under the law. |
Created by:
paulsutton97
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