Agreement | Contract Law

 Summary

This video introduces the creation of contracts, focusing on the fundamental elements, particularly agreement, essential for a legally binding contract.

Highlights

📜 Introduction to contract creation and its importance.

⚖️ Agreement is the foundational element of a contract.

🤝 Contracts require an offer and acceptance.

🔄 Exchange of obligations, or consideration, is vital.

📝 Intention to create legal relations must be established.

🎟️ Formality may be required in specific contracts.

📬 An overview of parties involved: offerer and offeree.

Key Insights

📖 Understanding Contract Formation: Contracts are legal agreements formed by mutual consent, requiring specific elements to be valid.

🔑 Importance of Agreement: Agreement serves as the cornerstone of contract law, as it dictates the parties’ obligations.

🎯 Offer and Acceptance Dynamics: The process involves an offer made by one party and its acceptance by another, essential for forming an agreement.

🤔 Consideration Explained: Consideration refers to the exchange of value between parties, critical for a contract’s enforceability.

🏛️ Legal Intent: Parties must intend to create a legally binding agreement, inferred from their conduct or explicitly stated.

🖊️ Role of Formality: While many contracts can be oral, some require written formality, particularly in specific legal contexts like land law.

🔄 Parties in Contract: Recognizing the roles of the offerer and offeree helps clarify the contracting process and the nature of agreements made.

Transcript

00:00:01 in this video we're going to move on to the next major topic within the law of contract this is arguably the most substantive topic of of all of them um and this is the topic which is going to examine the creation of contracts now we're going to talk very briefly in this lesson the process by which a contract is created specifically examining the fundamental key elements that are required for a contract to exist uh but we're going to also be taking an introduction to the first of these fundamental Elements which is of course

00:00:31 agreement and an introduction to an agreement um which we will then take into the next few lessons when we look at the component parts of an agreement and the different ways in which courts have approached whether or not an agreement exists uh for the ability for a contract to be legally binding so agreement is arguably the most foundational and the most important contract uh concept sorry within the law of contract and one of the reasons for this is because essentially if we were to define a contract contct we can just

00:01:01 Define a contract as essentially a a legal agreement it is a an agreement between parties uh to do something and that they are legally bound to do that particular thing to to perform some kind of action or to or to act in some kind of way and so as a result of which the agreement component of a contract is the most important because it essentially establishes the foundation of what a contract even is um and so essentially when we think about what a contract is we have to begin with the nature of a

00:01:30 agement now as a general recap what are the other elements of a contract that we're going to explore in this series so we know that a contract is made up of a number of essential elements okay um these are the four uh Essential Elements for a contract I've written in Brackets sometimes for one of them we'll get to that in a second so the first of these is agreement okay we have to have an agreement that takes place okay and we'll explore what that means in a second uh specifically the component

00:01:58 parts of an agreement the the the component parts being the offer and the acceptance of the offer the next important part is this idea of an exchange of obligations which we looked at in the previous lesson when we were examining theories of contracts because an exchange of obligations involves this idea of a quidd pro quo I.E something for something else which is sometimes described and is described in contract law as consideration there has to be consideration of contract um again we will get to that in future lessons

00:02:27 time and then the third element which is a requirement for a contract is this intention to create legal relations so not only is a contract an agreement but a contract is a legally binding agreement it is an agreement by the parties to be legally bound to the terms of that particular contract and so as a result of which there has to be some kind of contractual intent on the part of the individuals in question to be entering into legal relations they must be there must be knowledged that they are entering into legal relations or at

00:02:56 least their intent to enter into legal relations is either expressly stated or is inferred from their conduct and from their actions finally and this is only the case in some contracts it is not a necessary condition for the existence of a contract generally but it is necessary for some specific kinds of contracts this is the idea of formality the idea that the contract has to be structured in a particular way and this is often described through the type of medium in which the contract is communicated so

00:03:28 you will find and we will come to examples specifically within land law for example and and the various elements relating to deeds and and leases that a contract in that particular uh area of law has to be written it has to be a written contract it has to have have a certain amount of tangibility as in it is written down on a piece of paper for example and so that is a requirement of formality um but that's not the case for every contract and so therefore it is not a necessary condition for the

00:03:58 existence of a contract in its general form uh you can have oral contracts you can have oral agreements uh which which can be legally binding as well so given that these are the fundamental elements of a contract let's begin with the first of these topics the idea of agreement and we're going to spend quite a lot of time looking at agreement because agreement itself um given the fact that it is a legally binding contract legally binding agreement a contract is um we have to have an agreement for a contract to be

00:04:28 valid and given that agre itself is divided into two major elements um we have to spend a lot of time looking at both of them in turn so an agreement is a two-sided obligation essentially it is an obligation on the part of the person who wants to make the contract to make an offer to the other parties and for those other parties to accept that offer it is with these two elements that we have agreement within contract law so there has to be an offer and there has to be the acceptance of that offer okay

00:05:02 now we will get to what uh What uh uh negotiations leads to and things like counter offers and how an offer is made uh what an offer actually is how an acceptance of an offer is made things like the postal rule for example uh we'll get to all that in future lessons time uh but essentially when we talk about the the uh the fundamental requirements for an agreement we have to have an offer and we have to have an acceptance of that offer okay and it should also be the case that the offer the acceptance mirrors the offer okay it

00:05:33 should be the case that there is um there is there is a balance between the offer and the acceptance in terms of um the ability to form the agreement in question the final thing I want to note before we move on and look at uh the offer in more detail and the delineation between for example an offer and an invitation to treat the kind of ways in which an offer can be made um I just want to very quickly clear up uh some of the terminology referring to the parties to a contract this is very very basic

00:06:02 stuff anyway um given the fact that a contract is made or at least an agreement is made with the offer and the acceptance of an offer um the parties who form that contract specifically the parties who form that agreement are uh the offerer and the offeree so the offerer is the person who is making the offer uh and the offeree is the person who receives the offer and presumably in order to create an agreement they will accept that offer as well uh and so we will get to um we'll get to this in more

00:06:31 detail in future lessons time

1. What is the most fundamental concept within contract law?
2. The most fundamental concept is agreement. A contract is essentially defined as a legally binding agreement between parties to do something. Without an agreement, there can be no contract. Therefore, the concept of agreement forms the bedrock upon which all contract law is built.
3. Besides agreement, what other essential elements are required for a contract to exist?
4. Besides agreement, three other key elements are generally needed for a contract to exist. These are: consideration (an exchange of obligations, often described as "something for something else"), an intention to create legal relations (meaning the parties intend to be legally bound), and in some specific types of contracts, formality (which refers to the contract needing to be structured in a particular way, often requiring the contract to be in written form).
5. What is 'consideration' in the context of contract law?
6. Consideration refers to the exchange of obligations between parties. It's the idea of quid pro quo, "something for something else". Each party must provide some value or action to the other as part of the contract. This exchange of value is necessary to make a contract legally binding.
7. What does "intention to create legal relations" mean in the context of a contract?

This refers to the requirement that the parties involved in an agreement must intend for it to be legally binding. It's not enough for there to be an agreement; both parties must also understand and agree that they are entering into a contract that can be enforced in a court of law. This intent can be expressed explicitly or inferred from the context of their actions.

1. What is "formality" in contract law and when is it required?
2. Formality refers to the requirement that some contracts must adhere to specific formats, often requiring a written document. This is not a general requirement for all contracts; many contracts can be formed orally, but for certain specific types of contracts (e.g., some land or property contracts), a written contract may be required for it to be valid. This requirement often ensures tangibility and greater evidence.
3. What are the two essential components of an agreement?
4. An agreement, the foundation of a contract, is comprised of two key elements: an offer made by one party (the offeror) to another party and the unconditional acceptance of that offer by the receiving party (the offeree). Both of these components are vital to establishing an agreement within contract law.
5. What is the difference between an offeror and an offeree?
6. The offeror is the party who makes an offer to enter into a contract. The offeree is the party to whom the offer is made. When the offeree accepts the offer, it is the agreement between these two parties that can potentially form the basis of a legally binding contract.
7. Is a written contract always required?
8. No, not always. While formality, particularly a written contract, may be required for specific types of contracts such as some land contracts, it is not a universal requirement. Many contracts can be legally binding even if they are made orally (verbally). The key requirement is that all the essential elements (agreement, consideration, intention to create legal relations) are present, and that, if required, they conform to the formality required by that specific type of contract.