AFM231 Chapter 5: Chapter 5
18 May 2018
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Chapter 5
Introduction to Contract Law
Aritha is a aager at Coaster Plus Ltd that’s ioled ith uildig roller oaster for Ultiate Park
Ltd, and get supplies (steel tracking) from Trackers Canada Ltd.
• Amritha needs to extract a firm commitment from Trackers to ensure that Coasters receives the
necessary tracking in a timely fashion at the agreed upon price. Figure 5.1
• Should Tracker renege, Coasters can sue Trackers to recover any related financial loss
• A contract is a deliberate and complete agreement between two or more competent persons, not
necessarily in writing, supported by mutual consideration, to do some act voluntarily.
• Enforceable in a court of law
• The following is a brief synopsis of these elements (analyzed more in subsequent chapters)
• An agreement is composed of an offer to enter into a contract and an acceptance of that
offer
• Complete: the agreement must be complete, that is, certain.
• Deliberate: the agreement must be deliberate, that is, both parties must want to enter into
a contractual relationship. Formally known as an intention to create legal relations
• Voluntary: the agreement must be freely chosen and not involve coercion
• Between two or more competent persons: those who enter into a contract are known as
parties to the contract. Must have at least parties who must have legal capacity.
• One party can sue and be sued on it
• Supported by mutual consideration: a contract involves a bargain or exchange between
parties. Each party must exchange something of value with the other.
• Not necessarily in writing: oral contracts are enforceable. Better to have it in writing.
• One contract is created, both parties rely on the terms they have negotiated.
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Document Summary
A(cid:373)ritha is a (cid:373)a(cid:374)ager at coaster plus ltd that"s i(cid:374)(cid:448)ol(cid:448)ed (cid:449)ith (cid:271)uildi(cid:374)g roller (cid:272)oaster for ulti(cid:373)ate park. Ltd, and get supplies (steel tracking) from trackers canada ltd: amritha needs to extract a firm commitment from trackers to ensure that coasters receives the necessary tracking in a timely fashion at the agreed upon price. Must have at least parties who must have legal capacity: one party can sue and be sued on it, supported by mutual consideration: a contract involves a bargain or exchange between parties. Each party must exchange something of value with the other: not necessarily in writing: oral contracts are enforceable. Better to have it in writing: one contract is created, both parties rely on the terms they have negotiated. Legal factors in their business context: creating the contract. Communication: contract start from communication, maybe through informal contract or through a general inquiry made to a supplier, co(cid:373)(cid:373)u(cid:374)i(cid:272)atio(cid:374) is (cid:374)ot just a(cid:271)out dis(cid:272)ussi(cid:374)g possi(cid:271)ilities (cid:449)ith the other side.
