Contract - Invitation To Treat

 

1. In the last posting, the concept of an offer and an acceptance was discussed.
2. Chronologically, it was often the case that the first movement from a party constitutes an offer. So long as the offer is validly made and had not been revoked, an acceptance of it would form a contract.
3. There are exceptions to this general rule where events that though being the first movement , is not an offer.
4. A common example of an exception is that of an auction. The offer by an auctioneer in an auction, though being the first movement, is not an “offer” but an invitation made by the auctioneer for offers to be made by bidders. As such, in an auction, the bid made by a bidder is the "offer" and if such bid is accepted by the auctioneer, this is the “acceptance” part leading to the formation of a contract.
5. Therefore, the contact is formed not when the bidder bids but when the auctioneer accepts the bid. This action by the auctioneer, in legal terms, is called an “Invitation To Treat” or in easier terminology a request by the auctioneer to "Make Me An Offer"!.

Until the next post...here's a Bite Size goodbye!

Formation of Contract - Offer & Acceptance

1. A contract or agreement clearly require the involvement of more than one party. It is a meeting of the minds, a coming together between common intentions.
2. But often,the start of the process towards the formation of an agreement starts from one side. Where consequently there is movement of similar intention coming from the opposite, side the eventual meeting of what was once on opposites will result in a contract or an agreement. This is what is called an offer and an acceptance in the law of contract.
3. The determination of the exact point when a contract is formed has been the subject of many decisions by courts of law. This is because the formation of contracts brings about rights and obligations. Thus, the exact point when this is created becomes pivotal. 
4. An offer once validly made is open to acceptance so long as the offer has not been revoked or lapse. The illustration of a handshake above may be used as an example. An extended hand (offer) offering a handshake (contract) is not a handshake until another hand (acceptance) grabs it and shakes it. It is at the time of the formation of the handshake that a contract is formed, with the corresponding rights and liabilities.

 Until the next posting, a bite size goodbye to everyone!

 

Capacity to Contract - Minors

1. In the last posting about Contracts, the capacity of parties to enter into valid contracts was discussed very briefly. In this posting, we will look at how the law looks upon minors' capacity to enter into valid contracts.
2. Contract law in general stipulates certain categories of persons that do not have the power to make contracts. Some examples are people who are mentally ill, drunk or drugged. For this posting, we will look at the category of children or minors.
3. Minors do not have the power to enter into contracts. Consequently, if such a contract is made, the minor may avoid the duty to perform under such contracts. The position would be taken as if no such contract was made. 
4. There are some exceptions to the rule. This is for contracts for apprenticeships, training and education. The reason for such exception is to enable organisations some certainty in contracting with a child where such contracts are for the child to learn a trade or to acquire skills towards earning a living in the future.
5. A minor is the definition given to a child at varying ages as determined by different  countries. The defined ages are usually 18, 20 or 21.  Japan, Taiwan and Korea sets it at 20 while Australia, Canada and India sets it at 18. For certain offences relating to drink and drugs or enabling provisions like the right to vote or make a will, the defined age may vary from that applying to the age to define contractual capacity.

Until the next post, a Bite Size goodbye to everyone. 

 

Contract

1. A Contract is a very popular term. From it springs the very essence of what law is to many people.....court rooms and juicy legal battles!
2. A Contract is the legal description of an agreement. It is entered into between 2 or more persons. There are certain rules applying before an agreement qualifies as a Contract in the legal sense.
3. One of these rules seek to separate what is  intended to be binding from that not intended to be so. The ingredient that so separates is called "consideration". In very basic terms, a contract that has "value" coming from the parties would be said to have "consideration" present and is not made for free. For example, if Mr. A promises to pay Mr. B 100 dollars but Mr. B does not in turn promise Mr. A to do something for that 100 dollars, it is said that there is no "value" coming from Mr. B to bind Mr. A to his promise. In this instance, there is no contract formed between Mr. A and Mr. B. There are further refinements to this rule and I hope to discuss them in later postings.
4. In addition to separating agreements not intended to be binding, another rule surrounding the formation of Contracts is that it can be verbal and not necessarily always in writing.
5. There are other related issues surrounding a Contract, for example the capacity of a person to be a party to a Contract, limitation of actions from breaches of Contract and the formation of rights and the creation of obligations. These areas warrant separate elaboration and would be better explained in a separate posting of its own.

 I wish you a Bite Size goodbye until the next posting.

Act of God

1. In the last post on Force Majeure, an Act of God was described as a Force Majeure event excusing one from performing one's duties under an agreement.
2. An Act of God is an event which is so extraordinary that it cannot be guarded against or foreseen. It  commonly applies to natural events like earthquakes, floods, storms and hurricanes.
3. Should an event qualify as an Act of God and this is agreed as a Force Majeure event, then it would excuse a failure to perform one's contractual duties.
4. It should be remembered that Act of God is not Force Majeure but a component of Force Majeure.
5. Recently, there has been some debate surrounding the issue whether human activity triggered natural disasters would qualify a genuine Acts of God. A few examples would be water pressure at dams releasing geological faults and resulting in earthquakes and oil drilling triggering mud volcanos. The effects of these remains to be seen.

Bite Size Sign Off....until the next post!

Force Majeure

1. Force Majeure, which means "superior force" in French is an excuse for not keeping up a bargain or a promise.
2. When two or more parties agree to do something, it is also common to list a set of events excusing or forgiving a  party's performance.Among these events, Force Majeure would be a popular and common inclusion.
3. However, Force Majeure needs to be made up of specified events. The typical ones are "Act of God", war, government intervention, unusually extreme weather and the like. 
4. The common trait for events making up Force Majeure is that it is not reasonably foreseeable by the parties to the contract. This means that "negligence" or "incompetency" are not events that can support a Force Majeure event.

Bite Size Sign Off....until the next post!

Bite Size Take Off!

Hello All, I suppose the title says it all. The mission is to de-mystify the Law. Slowly but surely. In bite sizes.  Its  my little way of giving back.So here's to the first bite size sign off!

p.s. - Oh. And by the way, this blog will try to show that lawyers do punctuate. And can write in short sentences :-).