ACCT 202 Lecture Notes - Lecture 7: Canada Border Services Agency, Click Wrap, Electronic Document
29 May 2018
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Chapter 7: An Introduction to the Legal Relationship (pg. 114-131) (PDF:147-164)
A contract may be defined as an agreement made between two or more persons that is Enforceable at
law.
HISTORICAL DEVELOPMENT OF THE LAW OF CONTRACT
The law of contract is essentially an area of law relating to business transactions. In the past transaction
were instantaneous and informal contracts which led to disputes and fell within the jurisdiction of the
ecclesiastic courts since it was broken promise which is seen as a moral issue. The bargain theory of a
contract: where each party to the agreement derived some benefit from the agreement in return for a
promise to do or give something in return. Approach formed the basis of modern contract law. In
twenty-first century, our contracts and commerce are governed by case law and statutes are from the
1800s and 1900s.
Intention to be bound: The assumption at law that strangers intend to be bound by their promises.
THE ELEMENTS OF A VALID CONTRACT
Creation of a binding contract that the courts will enforce requires the contracting parties to meet a
number of requirements prescribed by the law of contract (the elements of a valid/binding contract):
(1) an intention to create a legal relationship,
(2) offer,
(3) acceptance,
(4) consideration,
(5) capacity to contract, and
(6) legality.
Contracts must also be free from any vitiating elements, such as mistake, misrepresentation, or undue
influence.
1) THE INTENTION TO CREATE A LEGAL RELATIONSHIP
Contract as a bargain or agreement struck by two parties is based upon the premise that the end results
ill e a eetig of the parties’ ids o the ters ad oditios that ill for their agreeet ith
each other. The parties must establish particular elements of the contract itself. Consensus ad idem:
Agreement as to the subject or object of the contract. The parties must be of one mind. First
requirement, then, for a valid contract, must be the intention on the part of the promisor to be bound
by the promise made. If the intention is denied, the courts will usually use the conduct of the party at
the time that the statements were made as a test, and assess such conduct and statements from the
poit of ie of the reasoale perso
The law recognizes certain kinds of promises or statements as ones that are normally not binding, unless
established as such by the evidence but They (families/advertisers) may, nevertheless, be bound by their
promises if the party accepting their promises can convince a court that the promisor intended to be
bound by the promise.
while an advertiser is not normally bound by the claims set out in an advertisement, if a clear intention
to be bound by them is expressed, then the courts will treat the promise as one made with an intention
to create a legal relationship eg. Carbolic Smoke Ball Company The purpose of the advertisement or
display is merely to invite offers that the seller may accept or reject. outlines the effects of a statement,
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Chapter 7: an introduction to the legal relationship (pg. A contract may be defined as an agreement made between two or more persons that is enforceable at law. The law of contract is essentially an area of law relating to business transactions. In the past transaction were instantaneous and informal contracts which led to disputes and fell within the jurisdiction of the ecclesiastic courts since it was broken promise which is seen as a moral issue. The bargain theory of a contract: where each party to the agreement derived some benefit from the agreement in return for a promise to do or give something in return. Approach formed the basis of modern contract law. In twenty-first century, our contracts and commerce are governed by case law and statutes are from the. Intention to be bound: the assumption at law that strangers intend to be bound by their promises.
