Contractual Necessity Or Illusory Concept

Discuss About The Contractual Necessity Or Illusory Concept.

A contract is referred to a legal management which creates a legal relationship between two or more parties. A contract can be written or oral as long as certain essential elements are fulfilled by parties of the contract which include an offer, acceptance, valid consideration, mutual intention, the capacity of parties, and lawful subject matter (McKendrick, 2014). In order to create a contract, an offer must be given by a party to another for acceptance, and the party must accept it without making changes in its terms. An offeror is the party making an offer and offeree is the party to whom the offer is made. In Carlill v Carbolic Smoke Ball Co (1893) 1 QB 256 case, a judgement was given by the court that an offer must have the capacity to bound offeror into a legal relationship if it is accepted by the offeree (Jones, 2016). The acceptance of parties must be communicated, and it should be free from external forces. A valid consideration is another requirement which is referred to the exchange of promises or money.

In Thomas v Thomas (1842) 2 QB 851 case, it was held that a consideration is something which has a value in the eyes of the law. In Re McArdle (1951) Ch 669 case, the court held that past consideration is not valid and the consideration must be present (Turner, 2014). The parties to a contract must have a mutual intention to bind themselves into terms of the contract. In Jones v Padavatton (1969) 1 WLR 328 case, the court held that domestic agreement did not create a legal relationship because parties did not intend to enforce other parties legally (Gulati, 2011). The parties to a contract must be competent to create a legal relationship; incompetent parties include a minor, insane, intoxicated and insolvent person. The contract must have a lawful subject matter which means its subject cannot violate public policy or prohibited by law such as a contract to kill.

Application

In the present case, Graham made a contract with Stuart through the telephone. A contract can be oral or written as long as its parties fulfil the essential elements of a contract. Graham and Stuart fulfil all the essential elements of a contract. Both parties gave a valid offer and acceptance along with a valid consideration. Both parties are competent, and they have the intention to create a legal relationship. The subject matter was lawful as well, therefore, a valid contract has constructed between the parties. Graham cannot cancel the contract, and Stuart can take legal action in case Graham breaches the contractual terms.

Conclusion

In conclusion, a valid contract has constructed between Graham and Stuart because both parties fulfil the essential elements and a contract can be written or oral. Stuart could take legal action against Graham if he did not comply with its terms.

References

Carlill v Carbolic Smoke Ball Co (1893) 1 QB 256

Gulati, B. (2011) Intention to Create Legal Relations: A Contractual Necessity or an Illusory Concept. Beijing L. Rev., 2, p.127.

Jones v Padavatton (1969) 1 WLR 328

Jones, E. (2016) Richard Stone and James Devenney, Texts, Cases and Materials on Contract Law. The Law Teacher, Business-law, pp.393-396.

McKendrick, E. (2014) Contract law: text, cases, and materials. England: Oxford University Press (UK).

Re McArdle (1951) Ch 669

Thomas v Thomas (1842) Economics QB 851

Turner, C. (2014) Key Cases: Contract Law. Abingdon-on-Thames: Routledge.