Four Main Rules in formation of a Contract

 

When a contract is formed the four main rules are an offer, acceptance, consideration, and the intention to create legal relations between the parties involved.

There are five elements in a contract that is offer, acceptance, awareness, consideration, and capacity, with these five elements the contract becomes an enforceable contract.

There are seven elements required for the contract to become valid and enforceable that is the offer, acceptance, consideration, intention to create legal relations, authority with capacity, and certainty. Without any of the elements, the contract will not be legally binding and may or may not be enforced by the courts.

There are Six Essential Elements in a Contract:-

1. Offer
2. Acceptance
3. Awareness
4. Consideration
5. Capacity
6. Legality

Coercion or undue influence can make a contract null and void. If any of the parties commits an illegal act the contract becomes void, if one of the parties becomes incapable of performing the terms in a contract, or if one of the parties has an eventful death. A voidable contract can be corrected through ratification.

The performance of the contract will enable the party to break the law will make the contract invalid.

To enforce the contract contact the opposite party and ask him to perform his part of the contract.

Give the party an notice to perform if the party does not perform start the legal proceedings.

If there is a breach of contract one can start the legal proceedings.

The remedies for the breach of contract are:-

1. Specific Performance
2. Injunction
3. Rescission
4. Liquidated Damages
5. Nominal Damages

Courts will never enforce an illegal bargain. Contracts are only enforceable when they are made with the intention that they are legal .

Promissory Estoppel in a Contract - The party can recover on the basis of a promise made when the party's reliance on the promise was reasonable and the party attempting to recover detrimentally relied upon the promise.

There are three categories of people who lack the capacity to contract:

1. Minors
2. Individuals with psychological difficulties 
3. Intoxicated individuals.

A contract that is unfair and oppressive to another party in a way it suggests abusive in its formation the court will find the contract unconscionable and will refuse to enforce it. A contract may also be unconscionable if it has unfair bargaining with unfair substantive terms shown in writing in the contract.