Monday, February 8, 2010

Law of Contract

There are few Terminologies in this topic "Law of Contract", I have to specify them and make them clear before going to deeper understanding.

Agreement- Both party agree on something with a gentleman shake hand from written or non-written form. It must also be you agree something that is agreed by someone. So that, we could say these parties's perspectives are tally. It can be a legally binding or not a legally binding.

Contract-Contact is a subset of agreement and it can also be defined as an agreement enforceable by law. This is the legally binding agreement which accurred between two individuals or parties. e.g. An airline company must comply their agreement with customer that if there is a flight delayed exceed 1 and half hour, the airline company must pay the compensation amount as what is in the contract. If there is a breach, customers have the right to sue the airline company.

Mostly of the contract are in the form of written and spoken; whereas, unwritten form would be based the cultural, norm, conduct and habit of a society.

Offer- This is an important element to form an agreement. one individual or party have to be proposing something that must signify the other's party willingness to do or to abstain from doing anything.

offer can be delivered in two ways:
expressed- in a written, spoken way.
implied - other than written and spoken. base on conducts, norms, cultural, etc.


There are two types of offer:
Bilateral:two specified parties involved. (1 to 1)
Unilateral:one party give an offer to the world at large.(1 to many)

Invitation to treat - It seems like an offer, but it is not actually an offer. It is an expression of willingness to negotiate and to invite people to come and give an offer.

The example of Invitation to treat that we see from daily live is displayed price tag of certain good in a shop. It invites people to come and see whether the price is reasonable. If the customer would like to buy it, he or she can just make an implied offer at the cashier or even ask for a discounted price.

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