The Concept of Contract


What is a contract?

A contract is an agreement that guves rise to obligations and which is enforceable and recognised by the law. 

Maclnnes v Gross [2017] - the judge observed that: "A contract can be made anywhre in any circumstances". 

Essentials of a valid contract

  • The parties must be in agreement, which traditonally means that one of them has made an offer which the other has accepted;
  • The parties must have each contirbuted something of value to the bargain, known as consideration;
  • The parties must intend to create a legal relationship.

If any of these essential elements are missing, the contract will ahve no legal effect and is not enforceable in the courts. 

Privity of contract

The privity of contract states that, only the parties to a contract are bound by it. The effect of this rule is that no one other than the parties to a contract can bring court action to enforce a contract. 

Tweddle v Atkinson [1861] 

This casse on privity is, where a man and woman were engaged to be married. Their respective fathers promised eachother that they woud each pay some money to the Tweddle's son when the couple married. The father of the groom paid as agreed but the father of the bride died before he had done so. Even thoguht the agreement had specifically provided the Tweddle's son should have the right to sue to enforce the promise, his action against his father-in-law's estate failed because he was not a party to the agreement. 

Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915]

The rule is that a contract cannot place a burden on a third party is illustrated in the above case. In which the House of Lords refused to impose on the defendant, a retailer not to resell the tyres below a certain price. This was because he was not a party to the contract made between the claimant manufacturer and the wholesaler (who supplied the tyres to the defendant), which contained the relevant term. The court affirmed the basic rule that a stranger to a contract cannot sue or be sued under it.

Exceptions to the third party rule

Under s11 Married Women's Property Act [1882] is states…


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