Contract Law Basics

Contract Law

Definition

• A contract is a legally binding agreement between two or more parties that creates rights and obligations between them.
• A contract is formed when one party makes an offer and the other party accepts it.

Offer and Acceptance

Offer

• An offer is a promise or commitment to do something in exchange for something else.
• An offer can be made by words, actions, or a combination of both.
• An offer can be:
  • Express: clearly stated in words or writing.
  • Implied: inferred from the circumstances or behavior of the party making the offer.
• An offer can be revoked or withdrawn at any time before it is accepted.

Acceptance

• Acceptance is the unconditional agreement to the terms of the offer.
• Acceptance can be made by words, actions, or a combination of both.
• Acceptance must be:
  • Unconditional: the offeree must accept the offer exactly as it is.
  • Definite: the acceptance must be clear and certain.
  • Communicated: the acceptance must be communicated to the offeror.
• Silence or inaction cannot be considered as acceptance.

Rules for Acceptance

• The acceptance must be made while the offer is still valid.
• The acceptance must be made by the offeree or their authorized agent.
• The acceptance must be communicated to the offeror in a reasonable manner.

Communication of Acceptance

• The acceptance can be communicated through:
  • Verbal communication: spoken words or oral agreement.
  • Written communication: written words or written agreement.
  • Conduct: actions or behavior that indicates acceptance.
• The acceptance is effective from the moment it is communicated to the offeror.

Counter-Offer

• A counter-offer is a response to an offer that includes different terms or conditions.
• A counter-offer is considered a rejection of the original offer and a new offer.
• A counter-offer can be accepted or rejected by the original offeror.

Contract Law

Definition

• A legally binding agreement between two or more parties that creates rights and obligations between them.

Offer and Acceptance

Offer

• A promise or commitment to do something in exchange for something else.
• Can be made by words, actions, or a combination of both.
• Can be express (clearly stated) or implied (inferred from circumstances or behavior).
• Can be revoked or withdrawn at any time before acceptance.

Acceptance

• Unconditional agreement to the terms of the offer.
• Can be made by words, actions, or a combination of both.
• Must be:
  • Unconditional: accepting the offer exactly as it is.
  • Definite: clear and certain.
  • Communicated: conveyed to the offeror.

Rules for Acceptance

• Must be made while the offer is still valid.
• Must be made by the offeree or their authorized agent.
• Must be communicated to the offeror in a reasonable manner.

Communication of Acceptance

• Can be communicated through:
  • Verbal communication: spoken words or oral agreement.
  • Written communication: written words or written agreement.
  • Conduct: actions or behavior that indicates acceptance.
• Effective from the moment it is communicated to the offeror.

Counter-Offer

• A response to an offer that includes different terms or conditions.
• Considered a rejection of the original offer and a new offer.
• Can be accepted or rejected by the original offeror.

Learn about the fundamentals of contract law, including the definition of a contract, offer and acceptance, and more. Understand how contracts are formed and the rights and obligations of parties involved.