ContractsPart1.ppt

Contract LawBy Krishn Shah Sources of Law Common Law (case law) Statutes Definition An agreement which the courts will recognise as enforceable Six essential elements 1. Intention 2. Offer and acceptance (agreement) 3. Consideration 4. Capacity 5. Consent 6. Legality Classification of Contracts p3.4 Valid contract Void contract Voidable contract unenforceable contract illegal contract formal contract simple contract Intention Common law - parties must have the intention at the time the contract was made to make a legally enforceable contract. Presumptions - law of contract distinguishes two situations - (a) agreement made in a domestic situation (b) agreement made in a commercial situation (a) Domestic and family situations Case law - Balfour v. Balfour [1919] 2 KB 571 Facts: Mr B was a British civil servant based in Ceylon. He and his wife returned to England on leave. Wife for health reasons, did not return with her husband to Ceylon at the end of the leave, the husband agreed that while they were apart, he would pay her 30 pounds per month as allowances. Separation became permanent and husband failed to pay . Wife sued for breach of contract. Held: Court held that there was no contract because it was not the intention of the parties when the agreement was made that their agreement include legal consequences. (purely domestic arrangement) From the Balfour case it does not mean that domestic agreements can never be binding or that all domestic agreements are not binding. The thrust of the Balfour case was that the marriage was still intact when the agreement was made If the agreements are of a serious nature the courts would interpret them as binding (case by case basis) Case Law: Wakeling v. Ripley (1951) 51 SR (NSW) 183 Facts: R, a wealthy old man asked his sister W, and her husband to come to Australia (from England) and live with him. R agreed to provide them home and support and leave them his property on his death. W and her hu