1

BACKGROUND

Contract is an agreement having a lawful object entered into voluntarily by two or more parties,

each of whom intends to create one or more legal obligations between them. The elements of a

contract are offer and acceptance by competent persons having legal capacity who exchanges

consideration to create mutuality of obligation. Contract law varies greatly from one jurisdiction

to another, including differences in common law compared to civil law, the impact of received

law, particularly from England in common law countries, and of law codified in regional

legislation.

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TABLE OF CONTENTS

BACKGROUND...............................................................................................................2

Chapter One.....................................................................................................................5

1.0 Introduction............................................................................................................5

Chapter Two.....................................................................................................................7

2.0 Law Of Contract.....................................................................................................7

2.1 Classification Of Contract.......................................................................................7

2.1.1 Contracts On The Basis Of Creation....................................................................7

2.1.2 Contracts On The Basis Of Execution..................................................................8

2.1.3 Contracts On The Basis Of Enforceability............................................................8

2.2 Essential Elements Of A Valid Contract..................................................................9

2.2.1 Offer And Acceptance..........................................................................................9

2.2.2 Intention To Be Legally Bound...........................................................................10

2.2.3 Consideration....................................................................................................11

2.2.4 Formation..........................................................................................................11

2.2.5 Affirmative Defenses..........................................................................................12

2.2.6 Formalities And Writing....................................................................................12

2.2.7 Invitation To Treat............................................................................................13

2.2.8 Third Parties.....................................................................................................14

2.3 Void Contract.......................................................................................................14

2.3.1 Misrepresentation..............................................................................................14

2.3.2 Mistake..............................................................................................................15

2.3.3 Duress And Undue Influence..............................................................................16

2.3.4 Incapacity..........................................................................................................16

2.3.5 Illegal Contracts................................................................................................17

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Chapter Three................................................................................................................18

3.0 Opinion On The Case............................................................................................18

3.1 This Contract Is A Valid Contract.........................................................................18

3.2 My Rule On This Issue..........................................................................................18

3.3 Reliance To Continue Working.............................................................................19

3.4 Doctrine Of Promissory Estoppel On The Case......................................................19

3.5 Reason For............................................................................................................19

Chapter Four..................................................................................................................20

4.0 Recommendation..................................................................................................20

4.1 Conclusion............................................................................................................20

References......................................................................................................................20

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CHAPTER ONE

1.0 INTRODUCTION

The law of contracts differs from other branches of law in a very important respect. It does not

lay down so many precise rights and duties which the law will protect and enforce; it contains

rather a number of limiting principles, subject to which the parties may create rights and duties

for themselves and the law will uphold those rights and duties. Thus, we can say that the parties

to a contract, in a sense make the law for themselves. So long as they do not transgress some

legal prohibition, they can frame any rules they like in regard to the subject matter of their

contract and the law will give effect to their contract.

A contract intends to formalize an agreement between two or more parties, in relation to a

particular subject. Contracts can cover an extremely broad range of matters, including the sale of

goods or real property, the terms of employment or of an independent contractor relationship, the

settlement of a dispute, and ownership of intellectual property developed as part of a work for

hire.

In common law legal systems, a contract is an agreement having a lawful object entered into

voluntarily by two or more parties, each of whom intends to create one or more legal obligations

between them. The elements of a contract are offer and acceptance by competent persons having

legal capacity who exchange consideration to create mutuality of obligation.

Proof of some or all of these elements may be done in writing, though contracts may be made

entirely orally or by conduct. The remedy for breach of contract can be "damages" in the form of

compensation of money or specific performance enforced through an injunction. Both of these

remedies award the party at loss the "benefit of the bargain" or expectation damages, which are

greater than mere reliance damages, as in promissory estoppel. The parties may be natural

persons or juristic persons. A contract is a legally enforceable promise or undertaking that

something will or will not occur. The word promise can be used as a legal synonym for contract,

although care is required as a promise may not have the full standing of a contract, as when it is

an agreement without consideration.

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We enter into contracts day after day. Taking a seat in a bus amounts to entering into a contract.

When you put a coin in the slot of a weighing machine, you have entered into a contract. You go

to a restaurant and take snacks, you have entered into a contract. In such cases, we do not even

realise that we are making a contract. In the case of people engaged in trade, commerce and

industry, they carry on business by entering into contracts.

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CHAPTER TWO

2.0 LAW OF CONTRACT

This is the body of law that governs oral and written agreements and subjects, such as agency

relationships, commercial paper, employment, and business organizations.

2.1 CLASSIFICATION OF CONTRACT

2.1.1 Contracts on the basis of creation

Express contract: Express contract is one which is made by words spoken or written. Example

No. 1: X says to Y, will you buy a car for RM 100000? Y says to X, I am ready to buy your car

for RM 100000. It is an express contract made rally. Example No. 2: X writes a letter to Y, I

offer to sell my car for RM 100000 to you. Y send a letter to Y, I am ready to buy your car for

Rs. 100000. It is an express contract made in writing.

Implied contract: An implied contract is one which is made otherwise than by works spoken or

written. It is inferred from the conduct of a person or the circumstance of the particular case.

Example: X, a coolie in uniform picks up the bag of Y to carry it from railway platform to the -

without being used by Y to do so and Y allow it. In this case there is an implied offer by the

coolie and an implied acceptance by the passenger. Now, there is an implied contract between

the coolie and the passenger is bound to pay for the services of the coolie.

Quasi or constructive contract: It is a contract in which there is no intention either side to

make a contract, but the law imposes contract. In such a contract eights and obligations arise not

by any agreement between the practice but by operation of law. e.g where certain books are

delivered to a wrong address the addresses is under an obligation to either pay for them or return

them.

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2.1.2 Contracts on the basis of execution

Executed contract: It is a contract where both the parties to the contract have fulfilled their

respective obligations under the contract. Example: X offer to sell his car to Y for Rs. 1 lakh, Y

accepts X offer. X delivers the car to y and Y pays Rs. 1 lakh to X. it is an executed contract.

Executory contract: It is a contract where both the parties to the contract have still to perform

their respective obligations. Example: X offers to sell his car to y for Rs. 1 lakh. Y accepts X

offer. It the car has not yet been delivered by X and the price has not yet been paid by Y, it is an

Executory contract.

Partly executed and partly executory contract: It is a contract where one of the parties to the

contract has fulfilled his obligation and the other party has still to perform his obligation. E.g X

offers to sell his car to y for Rs. 1 lakh on a credit of 1 month. Y accepts X offer. X sells the car

to Y. here the contract is executed as to X and Executory as to Y.

2.1.3 Contracts on the basis of enforceability

Valid contract: A contract which satisfies all the conditions prescribed by law is a valid

contract. E.g. X offers to marry y. y accepts X offer. This is a valid contract.

Void Contract: the term void contract is described as under section 2(j) of I.CA, 1872, A

contract which cases to be enforceable by law becomes void when it ceases to be enforceable. In

other words, a void contract is a contract which is valid when entered into but which

subsequently became void due to impossibility of performance, change of law or some other

reason. E.g. X offers to marry Y, Y accepts X offer. Later on Y dies this contract was valid at the

time of its formation but became void at the death of Y.

Void Agreement: According to Section 2(g), an agreement not enforceable by law is said to be

void. Such agreements are void- ab- initio which means that they are unenforceable right from

the time they are made. E.g. in agreement with a minor or a person of unsound mind is void –ab-

initio because a mino or a person of unsound mind is incompetent to contract.

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Voidable contract: According to section 2(i) of the Indian contract act, 1872, arrangement

which is enforceable by law at the option of one or more of the parties thereon but not at the

option of the other or other, is a voidable contract. In other words, A voidable contract is one

which can be set aside or avoided at the option of the aggrieved party. Until the contract is set

aside by the aggrieved party, it remains a valid contract. For e.g. a contract is treated as voidable

at the option of the party whose consent has been obtained under influence or fraud or

misinterpretation. E.g. X threatens to kill Y, if the does not sell his house for Rs. 1 lakh to X. Y

sells his house to X and receives payment. Here, Y consent has been obtained by coercion and

hence this contract is void able at the option of Y the aggrieved party. If Y decides to avoid the

contract he will have to return Rs. 1 lakh which he had received from X. If Y does not exercise

his option to repudiate the contract within a reasonable time and in the meantime Z purchases

that house from X for 1 lakh in good faith. Y cannot repudiate the contract.

Illegal Agreement: An illegal agreement is one the object of which is unlawful. Such an

agreement cannot be enforced bylaw. Thus, illegal agreements are always void – ab- initio (i.e.

void from the very beginning) e.g. X agrees to y Rs. 1 lakh Y kills Z. Y kill and claims Rs. 1

lakh. Y cannot recover from X because the agreement between X and Y is illegal and also its

object is unlawful.

Unenforceable contract: It is contract which is actually valid but cannot be enforced because of

some technical defect (such as not in writing, under stamped). Such contracts can be enforced if

the technical defect involved is removed.

2.2 ESSENTIAL ELEMENTS OF A VALID CONTRACT

2.2.1 Offer and acceptance

In order for a contract to be formed, the parties must reach mutual assent (also called a meeting

of the minds). This is typically reached through offer and an acceptance which does not vary the

offer's terms, which is known as the "mirror image rule". If a purported acceptance does vary the

terms of an offer, it is not an acceptance but a counteroffer and, therefore, simultaneously a

rejection of the original offer. The Uniform Commercial Code disposes of the mirror image rule

in §2-207, although the UCC only governs transactions in goods in the USA. As a court cannot

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read minds, the intent of the parties is interpreted objectively from the perspective of a

reasonable person, as determined in the early English case of Smith v Hughes [1871].

Contracts may be bilateral or unilateral. A bilateral contract is an agreement in which each of the

parties to the contract makes a promise or set of promises to each other. For example, in a

contract for the sale of a home, the buyer promises to pay the seller $200,000 in exchange for the

seller's promise to deliver title to the property. These common contracts take place in the daily

flow of commerce transactions, and in cases with sophisticated or expensive promises may

involve extensive negotiation and various condition precedent requirements, which are

requirements that must be met for the contract to be fulfilled.

Less common are unilateral contracts in which one party makes a promise, but the other side

does not promise anything. In these cases, those accepting the offer are not required to

communicate their acceptance to the offeror. In a reward contract, for example, a person who has

lost a dog could promise a reward if the dog is found, through publication or orally. The payment

could be additionally conditioned on the dog being returned alive. Those who learn of the reward

are not required to search for the dog, but if someone finds the dog and delivers it, the promisor

is required to pay. In the similar case of advertisements of deals or bargains, a general rule is that

these are not contractual offers but merely an "invitation to treat" (or bargain), but the

applicability of this rule is disputed and contains various exceptions. The High Court of

Australia stated that the term unilateral contract is "unscientific and misleading".

2.2.2 Intention to be legally bound

In commercial agreements it is presumed that parties intend to be legally bound unless the

parties expressly state the opposite as in a heads of agreement document. For example, in Rose

& Frank Co v JR Crompton & Bros Ltd an agreement between two business parties was not

enforced because it contained an 'honour clause' which stated the parties wish that the agreement

not be reviewed or enforced by a court.

In contrast, domestic and social agreements such as those between children and parents are

typically unenforceable on the basis of public policy. For example, in the English case Balfour v.

Balfour a husband agreed to give his wife £30 a month while he was away from home, but the

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court refused to enforce the agreement when the husband stopped paying. In contrast, in Merritt

v Merritt the court enforced an agreement between an estranged couple.

2.2.3 Consideration

Consideration is something of value given by a promissor to a promisee in exchange for

something of value given by a promisee to a promissor. Typically, the thing of value is a

payment, although it may be an act, or forbearance to act, when one is privileged to do so, such

as an adult refraining from smoking. This thing of value or forbearance from some legal right is

considered to be a legal detriment. In the exchange of legal detriments, a bargain is created. In

the United States, the emphasis has shifted to the process of bargaining as exemplified by Hamer

v. Sidway (1891). Roman law-based systems (including Scotland) do not require consideration,

and some commentators have suggested that consideration be abandoned, and estoppel be used

to replace it as a basis for contracts. However, legislation, rather than judicial development, has

been touted as the only way to remove this entrenched common law doctrine. Lord Justice

Denning famously stated that "The doctrine of consideration is too firmly fixed to be overthrown

by a side-wind."

Courts will typically not weigh the "adequacy" of consideration as long as the consideration is

determined to be "sufficient", with sufficiency defined as meeting the test of law, whereas

"adequacy" is the subjective fairness or equivalence For instance, agreeing to sell a car for a

penny may constitute a binding contract if a party desires the penny. This is known as the

peppercorn rule, but in some jurisdictions, the penny may constitute legally insufficient nominal

consideration. Parties may do this for tax purposes, attempting to disguise gift transactions as

contracts. Transferring money may be sufficient, particularly if there is accord and satisfaction.

2.2.4 Formation

In addition to the elements of a contract:

A party must have capacity to contract

The purpose of the contract must be lawful

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The form of the contract must be legal

The parties must intend to create a legal relationship

The parties must consent

As a result, there are a variety of affirmative defenses that a party may assert to avoid his

obligation.

2.2.5 Affirmative defenses

Vitiating factors constituting defences to purported contract formation include:

Mistake

Incapacity, including mental incompetence and infancy/minority

Duress

Undue influence

Unconscionability

Misrepresentation or fraud

Frustration of purpose

Such defenses operate to determine whether a purported contract is either (1) void or (2)

voidable. Void contracts cannot be ratified by either party. Voidable contracts can be ratified.

2.2.6 Formalities and writing

Typically, contracts are oral or written, but written contracts have typically been preferred in

common law legal systems; in 1677 England passed the Statute of Frauds which influenced

similar statute of frauds laws in the United States and other countries such as Australia. In

general, the Uniform Commercial Code as adopted in the United States requires a written

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contract for tangible product sales in excess of $500, and real estate contracts are required to be

written. If the contract is not required by law to be written, an oral contract is valid and therefore

legally binding. The United Kingdom has since replaced the original Statute of Frauds, but

written contracts are still required for various circumstances such as land (through the Law of

Property Act 1925).

If a contract is in a written form, and somebody signs it, then the signer is typically bound by its

terms regardless of whether he has actually read it provided the document is contractual in

nature. However, affirmative defenses such as duress or unconscionability may enable the signer

to avoid the obligation. Further, reasonable notice of a contract's terms must be given to the other

party prior to their entry into the contract.

An unwritten, unspoken contract, also known as "a contract implied by the acts of the parties",

which can be either an implied-in-fact contract or implied-in-law contract, may also be legally

binding. Implied-in-fact contracts are real contracts under which the parties receive the "benefit

of the bargain". However, contracts implied in law are also known as quasi-contracts, and the

remedy is quantum meruit, the fair market value of goods or services rendered.

2.2.7 Invitation to treat

Where a product in large quantities is advertised in a newspaper or on a poster, it generally is not

considered an offer but instead will be regarded as an invitation to treat, since there is no

guarantee that the store can provide the item for everyone who might want one. However, an

exception to this rule may be made if an advertisement includes a reward, which is what

happened in the famous case of Carlill v. Carbolic Smoke Ball Company, decided in nineteenth-

century England.

In Carlill, a medical firm, advertised a smoke ball marketed as a wonder drug that would,

according to the instructions, protect users from catching the flu. If it did not work, buyers would

receive £100 and the company said that they had deposited £1,000 in the bank to show their

good faith. When sued, Carbolic argued the ad was not to be taken as a serious, legally binding

offer. It was merely an invitation to treat, and a gimmick (a "mere puff"). But the court of appeal

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held that it would appear to a reasonable man that Carbolic had made a serious offer, and

determined that the reward was a contractual promise.

2.2.8 Third parties

The doctrine of privity of contract means that only those involved in striking a bargain would

have standing to enforce it. In general this is still the case, only parties to a contract may sue for

the breach of a contract, although in recent years the rule of privity has eroded somewhat and

third party beneficiaries have been allowed to recover damages for breaches of contracts they

were not party to. In cases where facts involve third party beneficiaries or debtors to the original

contracting party have been allowed to be considered parties for purposes of enforcement of the

contract. A recent advance has been seen in the case law as well as statutory recognition to the

dilution of the doctrine of privity of contract. The recent tests applied by courts have been the

test of benefit and the duty owed test. The duty owed test looks to see if the third party was

agreeing to pay a debt for the original party, and whereas the benefit test looks to see if

circumstances indicate that the promisee intends to give the beneficiary the benefit of the

promised performance. Any defense allowed to parties of the original contract extend to third

party beneficiaries. A recent example is the UK's Contracts (Rights of Third Parties) Act 1999.

2.3 VOID CONTRACT

2.3.1 Misrepresentation

Misrepresentation means a false statement of fact made by one party to another party and has the

effect of inducing that party into the contract. For example, under certain circumstances, false

statements or promises made by a seller of goods regarding the quality or nature of the product

that the seller has may constitute misrepresentation. A finding of misrepresentation allows for a

remedy of rescission and sometimes damages depending on the type of misrepresentation.

There are two types of misrepresentation: fraud in the factum and fraud in inducement. Fraud in

the factum focuses on whether the party alleging misrepresentation knew they were creating a

contract. If the party did not know that they were entering into a contract, there is no meeting of

the minds, and the contract is void. Fraud in inducement focuses on misrepresentation attempting

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to get the party to enter into the contract. Misrepresentation of a material fact (if the party knew

the truth, that party would not have entered into the contract) makes a contract voidable.

According to Gordon v Selico [1986] it is possible to misrepresent either by words or conduct.

Generally, statements of opinion or intention are not statements of fact in the context of

misrepresentation. If one party claims specialist knowledge on the topic discussed, then it is

more likely for the courts to hold a statement of opinion by that party as a statement of fact.

2.3.2 Mistake

A mistake is an incorrect understanding by one or more parties to a contract and may be used as

grounds to invalidate the agreement. Common law has identified three different types of mistake

in contract: common mistake, mutual mistake, and unilateral mistake.

A common mistake occurs when both parties hold the same mistaken belief of the facts. This is

demonstrated in the case of Bell v. Lever Brothers Ltd., which established that common mistake

can only void a contract if the mistake of the subject-matter was sufficiently fundamental to

render its identity different from what was contracted, making the performance of the contract

impossible.

A mutual mistake occurs when both parties of a contract are mistaken as to the terms. Each

believes they are contracting to something different. The court usually tries to uphold such a

mistake if a reasonable interpretation of the terms can be found. However, a contract based on a

mutual mistake in judgment does not cause the contract to be voidable by the party that is

adversely affected. See Raffles v. Wichelhaus.

A unilateral mistake occurs when only one party to a contract is mistaken as to the terms or

subject-matter. The courts will uphold such a contract unless it was determined that the non-

mistaken party was aware of the mistake and tried to take advantage of the mistake. It is also

possible for a contract to be void if there was a mistake in the identity of the contracting party.

An example is in Lewis v. Avery where Lord Denning MR held that the contract can only be

avoided if the plaintiff can show that, at the time of agreement, the plaintiff believed the other

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party's identity was of vital importance. A mere mistaken belief as to the credibility of the other

party is not sufficient.

2.3.3 Duress and undue influence

Duress has been defined as a "threat of harm made to compel a person to do something against

his or her will or judgment; esp., a wrongful threat made by one person to compel a

manifestation of seeming assent by another person to a transaction without real volition." An

example is in Barton v Armstrong [1976] in a person was threatened with death if they did not

sign the contract. An innocent party wishing to set aside a contract for duress to the person need

only to prove that the threat was made and that it was a reason for entry into the contract; the

burden of proof then shifts to the other party to prove that the threat had no effect in causing the

party to enter into the contract. There can also be duress to goods and sometimes, 'economic

duress'.

Undue influence is an equitable doctrine that involves one person taking advantage of a position

of power over another person through a special relationship such as between parent and child or

solicitor and client. As an equitable doctrine, the court has discretion. When no special

relationship exists, the question is whether there was a relationship of such trust and confidence

that it should give rise to such a presumption.

2.3.4 Incapacity

Sometimes the capacity of either natural or artificial persons to either enforce contracts, or have

contracts enforced against them is restricted. For instance, very small children may not be held to

bargains they have made, on the assumption that they lack the maturity to understand what they

are doing; errant employees or directors may be prevented from contracting for their company,

because they have acted ultra vires (beyond their power). Another example might be people who

are mentally incapacitated, either by disability or drunkenness. In these cases the contract is

either void or voidable.

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2.3.5 Illegal contracts

If based on an illegal purpose or contrary to public policy, a contract is void. In the 1996

Canadian case of Royal Bank of Canada v. Newell. A woman forged her husband's signature,

and her husband signed agreed to assume "all liability and responsibility" for the forged checks.

However, the agreement was unenforceable as it was intended to "stifle a criminal prosecution",

and the bank was forced to return the payments made by the husband.

In the U.S., one unusual type of unenforceable contract is a personal employment contract to

work as a spy or secret agent. This is because the very secrecy of the contract is a condition of

the contract (in order to maintain plausible deniability). If the spy subsequently sues the

government on the contract over issues like salary or benefits, then the spy has breached the

contract by revealing its existence. It is thus unenforceable on that ground, as well as the public

policy of maintaining national security (since a disgruntled agent might try to reveal all the

government's secrets during his/her lawsuit). Other types of unenforceable employment contracts

include contracts agreeing to work for less than minimum wage and forfeiting the right to

workman's compensation in cases where workman's compensation is due.

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CHAPTER THREE

3.0 OPINION ON THE CASE

“Gulf Charter Golf Inc, manufacturers and sells golf apparel and supplies. Matthew Scott had

worked as a Gulf sales representatives for about a year when he was offered a position with one

of Gulf’s competitors.

Robert Jerry, Gulf president, urged Scott to turn down the offer and promised to guarantee him a

10% commission “for the remainder of his life”. Jerry also promised Scott that he would only be

fired for dishonesty or disability.

Three years later, Jerry fired Scott. Scott sued Jerry and the company, alleging breach of

contract.

Gulf argued that Jerry’s promises were not enforceable because they were not being capable of

being performed within one year”.

3.1 THIS CONTRACT IS A VALID CONTRACT

This is clearly a Valid Contract it has the value and condition of a contract like offer and

acceptance, where offeror and offeree that is to say parties involved communicated and

mutually. It is also has intention to be legally bound by considering what the Gulf president is to

offering to sale representative. By doing this the contract is formed whether written or verbally.

3.2 MY RULE ON THIS ISSUE

The expression a verbal contract is not worth the paper it's printed on is both true and false.

Verbal contracts are, in many cases, legally enforceable and binding on the parties who make the

agreement. However, proving the terms of a verbal contract can be difficult, and usually result in

a he said, she said disagreement. Additionally, in certain cases, verbal agreements are prohibited

from enforcement by law, even if you can prove the terms of the contract.

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3.3 RELIANCE TO CONTINUE WORKING

I thought that Scott was deceived by what the employer’s verbal statement outline and he doesn’t

consider other condition to get him fire from the job. At long last this contract is not enforceable, it lacks

written back for him to enforce it by using legal action. He can return to his former job if possible

3.4 DOCTRINE OF PROMISSORY ESTOPPEL ON THE CASE

In the law of contracts, the doctrine that provides that if a party changes his or her position

substantially either by acting or forbearing from acting in reliance upon a gratuitous promise,

then that party can enforce the promise although the essential elements of a contract are not

present. The promisee has the right violet what he promised when he is unable to deliver as a

result of economy loss or alike.

3.5 REASON FOR

Generally, oral or verbal contracts are indeed legally enforceable, but there’s a fundamental

problem, can you prove what was agreed upon? That’s why written contracts are far more useful,

because everything’s down in, well, black and white.

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CHAPTER FOUR

4.0 RECOMMENDATION

Generally, courts do not inquire whether the deal between two parties was monetarily fair—

merely that each party passed some legal obligation or duty to the other party. The dispositive

issue is presence of consideration, not adequacy of the consideration. The values between

consideration passed by each party to a contract need not be comparable.

For instance, if A offers B $200 to buy B's mansion, luxury sports car, and private jet, there is

still consideration on both sides. A's consideration is $200, and B's consideration is the mansion,

car, and jet. Courts in the United States generally leave parties to their own contracts, and do not

intervene. The old English rule of consideration questioned whether a party gave the value of a

peppercorn to the other party. As a result, contracts in the United States have sometimes have

had one party pass nominal amounts of consideration, typically citing $1. Thus, licensing

contracts that do not involve any money at all will often cite as consideration, "for the sum of $1

and other good and valuable consideration".

However, some courts in the United States may take issue with nominal consideration, or

consideration with virtually no value. Some courts have since thought this was a sham. Since

contract disputes are typically resolved in state court, some state courts have found that merely

providing $1 to another is not a sufficiently legal duty, and therefore no legal consideration

passes in these kinds of deals, and consequently, no contract is formed. However, this is a

minority position.

4.1 CONCLUSION

This is the body of law that governs oral and written agreements and subjects, such as agency

relationships, commercial paper, employment, and business organizations. The law of contracts

differs from other branches of law in a very important respect. It does not lay down so many

precise rights and duties which the law will protect and enforce; it contains rather a number of

limiting principles, subject to which the parties may create rights and duties for themselves and

the law will uphold those rights and duties. Thus, we can say that the parties to a contract, in a

20

sense make the law for themselves. So long as they do not transgress some legal prohibition,

they can frame any rules they like in regard to the subject matter of their contract and the law

will give effect to their contract.

A contract intends to formalize an agreement between two or more parties, in relation to a

particular subject. Contracts can cover an extremely broad range of matters, including the sale of

goods or real property, the terms of employment or of an independent contractor relationship, the

settlement of a dispute, and ownership of intellectual property developed as part of a work for

hire.

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REFERENCES

http://www.expertlaw.com/library/business/contract_law.html

http://en.wikipedia.org/wiki/Contract

http://www.websukat.com/BL-Classification-of-contracts.htm

http://www.newagepublishers.com/samplechapter/001048.pdf

http://www.businessdictionary.com/definition/law-of-contract.html

http://en.wikipedia.org/wiki/Contract#Contract_theory

http://www.ehow.com/about_5569485_laws-verbal-agreements.html#ixzz2jLsWah8Z

http://www.askdavetaylor.com/are_verbal_contracts_legally_enforceable/

#v48GRqyqzzZOwuS7.99

http://www.ehow.com/about_5569485_laws-verbal-agreements.html

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