Contract Law Is Vital As It Provides Legality For Agreements

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Contract law is vital as it provides legality for agreements made between parties. English contract law was developed as common law which relies a lot on precedent. To form a legal contract, there needs to be offer, acceptance, consideration, and intention to create legal relations, capacity to contract and the final contract (Open University, 2016). Consideration in contract law, is an exchange of something of value between two or more parties in a contract. Each party in a contract must be a promisor and a promisee. A promisor creates an agreement that provides consideration to the promisee in exchange for the promisee’s agreement to provide a service. The value of consideration from the promisor must be of the same value as the performance of the contract terms by the promisee (Open University, 2016). There are two types of consideration, executed consideration and executory consideration. For example, if one party in a contract makes a promise in exchange for a service from the other party, when the service is completed, it is called executed consideration. The consideration is executory when there’s an exchange of promises to carry out an act in the future. For example, if an item was bought online and paid using a credit card, there is a promise from the consumer to pay the money and from the supplier to deliver the item (Open University, 2016). Past consideration refers to a promise made before the contract is drawn up. Therefore these agreements can be rendered invalid or unenforceable in a court of law (Furmston, 2012). The common law doctrine of privity states that only the individuals who are parties to a contract are able to take action to enforce it, which means that they can be sue or be sued (Open University, 201... ... middle of paper ... ...aimant is bound by an existing contractual duty to the defendant • where the claimant is bound by an existing contractual duty to a third party. (The Open University, (2016), W202: Unit 3: Consideration, intention to create legal relations,privity and capacity, Chapter 3.2). Insuffiency of consideration is seen in the case of Collins v Godefroy (1831). In this case the defendant, Godfrey had subpoenaed Collins, the claimant to attend court as an expert witness to give evidence on his behalf and had agreed to pay the expenses for this service. The defendant then refused to pay the fees so the claimant sued to recover his expenses. However the claimant was under public duty to attend the hearing due to the subpoena. The court ruled that the defendant is not under any legal obligation to pay the claimant as there was an existing public duty (Collins v Godefroy (1831).
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