Law of Contract

INTRODUCTION.
A contract is a promissory agreement between two or more persons that creates, modifies, or
destroys a legal relation 1. As according to The Law of contract Act [CAP. 345 R.E.2019] section
2(1)h an agreement enforceable by law is a contract2. A contract can also mean an agreement
creating and defining obligations between the parties as defined by SALMOND. Therefore, a
contract arises from an agreement. An agreement simply means a promise, an offer or proposal
made by one party where acceptance is made by another person to whom the offer is made. It’s
when two minds settle in the same understanding, coming or knitting together of minds ; the
coming together in accord of two minds; a coming together in opinion or determination of minds
on a given proposition3. Contracts can be classified into several types based on validity, mode of
formation and performance. According to validity a contract can either be valid, voidable or
void where as basing on formation a contract can be expressed or implied contract , and
according to performance a contract can be executed or executory, unilateral or bilateral contract.
As agreements are basis of contracts, every contract must be originated from a certain
agreement, but at the same time, not all agreements are capable of being contracts since an
agreement to be a contract it must be enforceable by law. Agreements which can not be
enforceable by of law are not contracts at all. The following below are features which may
constitute to occurrence of a contract from an agreement..
MAIN BODY.
Offer and Acceptance. These are the basis of an agreement formation,. An Offer is to be made
and Acceptance follows to fulfill an agreement. These two are as well explained below
respectively
An offer, this simply means kind of suggestions or proposal made by one person and directed
to another, who either agrees the suggestion or proposal accepts unconditionally by concluding
respectively. The person making an offer is called the offeror and the person whom the offer is
made is called the offeree4. A valid offer must be capable of creating legal relations that means
even when it is accepted it must be capable of creating a valid contract. Offer must be certain ,
define and not vague, that means it should not bring about uncertainty to the mind of the offeree.
Further more, an offer should be communicated for it to be effective since when no
communication is made, acceptance is not there anymore as well as a contract doesn’t exist. In
section 4(1) of the law of Contract Act [CAP. 345 R.E.2019] communication of a proposal is
complete when it comes to the knowledge of the person to whom is made 5.This clearly shows
that when the proposal made is not in the knowledge of the offeree, it’s not complete. Example
in the case of LALMAN SHUKLA VS GAURI DATT (1913) 'S sent his servant L to trace his
missing nephew .He then announced that any body would be entitled to a certain reward. L found
1 Black’s Law Dictionary

2 Law of contract Act [CAP.345 R.E.2019]
4 Contract Law, Elliott and Quinn
5 Law of Contract Act [CAP. 345 R.E.2019]
the lost kid with unawareness of the announced reward , subsequently, when he came to know,
he claimed. The judgement stood that he was not entitled to the reward since communication of
that offer was not in his knowledge. As in addition to that an offer should be distinguished from
invitation to treat for it to be clear since in invitation to treat, the person sending out the
invitation doesn’t make an offer but invites a party to make an offer. For example, in the case of
PHARMACEUTICAL SOCIETY OF GREAT BRITAIN VS BOOTS CASH CHEMISTS
(1953). Goods are sold under the self service system . Customers select goods in the shop and
take them to the cashier for payment of price. In this case, a contract is not made when a
customer selects the goods, but when the cashier accepts the offer to buy and receives the price.
Acceptance of an offer means unconditional agreement to all the terms of that offer6.
Acceptance will always be oral or in a writing but in some cases it can be implied, that is through
the actions by the offeree, for example delivering goods in response to an offer to buy. Here,
when a proposal is accepted, it becomes a promise and the parties change to promisor and
promisee. Section 2 (b) of the Law of contract Act [CAP. 345 R.E.2019] explains that when the
person to whom offer is made accepts the offer, it is changed to the promise. As earlier
explained, acceptance can be expressed orally or in writing but also in conducts of the offeree. A
clear illustration is provided in the case of CARLILL VS CARBOLIC SMOKE BALL CO.
(1893) 1 QB. The defendants are the manufactures of smokeballs’ which they claimed could
prevent flu. They advertised that if anyone used their smokeball for a specified time and still
caught flu, they would pay that person Euro100 and that offer proved that they meant as they
deposited Euro 1,000 to their bankers. Mrs.Carlill bought and used it and still caught flu.
Therefore acceptance of an offer was made as a person took the medicine and a promise was to
be fulfilled in return since acceptance was there.
Free Consent , . Consent is well defined in section 13 of the Law of Contract Act [CAP. 345
R.E.2019]. It is when minds agree upon the same thing in the same sense. A person is said to
have accepted the valid offer as he or she freely accepts it .In section 14(1)a, b, c, d and e of the
same act, free consent is accompanied with exception of fraud, undue influence,
misrepresentation, mistake and coercion7. If consent has been obtained through one of these
factors a contract formed is not valid. It might be void or voidable contract. So an agreement
constitution a clear contract should be made from a free consent.
Lawful Object, for an agreement to be enforceable by the law, the object should be lawful, this
means it should not be illegal, immoral or opposed to public policy for example illegal drugs like
cocaine. A lawful Object can be land, minerals, buildings or phones. Section of 23(1)a, b, c, d
and e of Law Contract Act [CAP. 345 R.E.2019] provides situations in which an object can not
be lawful.
6 Contract Law, Elliott and Quinn

7 Law of Contract Act [CAP.345 R.E2019]
Lawful Consideration. It’s provided in section 23(1) of the Law of Contract Act [CAP. 345
R.E.2019]. Consideration means something which is of value in the eye of the law8.It also means
something given in return9.It can be money or minerals, as long as valuable in eyes of the law.
An agreement which lacks consideration can not led to contract formation otherwise it will be a
domestic agreement. This is because an agreement is enforceable by the law only when both
parties give something and get something in return. For example, in the case of WHITE VS
BLUETT (1853), a father promised not to make his son repay the money he had borrowed if the
son promised not to keep bothering him with complaints. The court held that the son’s promise
was my sufficient consideration to make his father’s promise binding, because it was not of
economic value, therefore consideration must of economic value. Consideration must also be
sufficient as in the case of
Competence of the parties . A contract is made between competent parties. Parties should be
capable of entering into a contract, provided in section 11(1) of the Law of Contract [CAP.345
R.E2019] that a person is capable of entering in a contract if he is in age of majority according
to the law to which he is a subject, who is of sound mind and is not disqualified by any law to
which he is a subject. So parties forming a contract should be competent.
Intention to create legal relations. Among all other factors, having intention to create legal
relations is mostly important since if there is no intention to enforce an agreement legally, a
contract can not be formed and it remains as a domestic agreement or social agreement. For
example agreements between husband and wife, between child and parents mostly do lack
intention to create legal relations. For example in the case of JONES VS PADVATTON (1969).
In this case a mother had been creating several agreements with her daughter, at first a mother
wanted her daughter to quit her secretarial job and train to be a barrister in England and several
agreements followed later. On the fact of the case the majority of the court of Appeal considered
that neither agreement has intention to create legal relations, they only had a merely trust to each
other just keeping the bargain. Therefore parties must have an intention to bind an agreement
legally. The case of BALFOUR VS BALFOUR(1919), A husband promised to pay his wife
household allowance of 30 pounds every month. Later the parties separated so the husband failed
to pay the allowance. It was also held that the parties had no intention to create legal relations.
CONCLUSION.
Generally, a contract originates from an agreement which is made from competent parties with
accepted certain and clear offer in a free consent ,there with lawful Object and lawful
consideration both having intention to create legal relations. Where agreements which lacks
either of these, can not be legally bound, meaning that they can not afford to be contracts.

9 Basic Principles of English Contract Law
BIBLIOGRAPHY
BOOKS
• ALLEN & OVERY Basic Principles of English Contract Law, Foundation Press
2019
• ELLIOTT & QUINN Contract Law, Great Britain (1996)
• BLACK’S LAW DICTIONARY
CASE LAWS
• Lalman Shukla Gauri Datt (1913)

• Pharmaceutical society great Britain vs Boots cash Chemist (1953)
• Carlill vs Carbolic Smoke Ball co.(1893) 1QB
• White vs Bluett (1853)
• Jones vs Padavatton (1969)
• Balfour vs Balfour(1919)
STATUTES
The Law of Contract Act [CAP.345 R.E.2019]

Law of Contract

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INTRODUCTION.

1 Black’s Law Dictionary

6 Contract Law, Elliott and Quinn

8 Black’s Law Dictionary

• Lalman Shukla Gauri Datt (1913)

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