| No matter what country you are in a contract is | | | | to another. A simple example of an offer is "I |
| generally the same. A contract is a legally binding | | | | want to buy your blue car for $5000". This is a |
| agreement. What this means is that if somebody | | | | clear offer. |
| promises you they will do something in return for | | | | An Acceptance |
| you doing something for them, then a court will | | | | This is fairly simple. There must be an acceptance |
| enforce this promise if that party (or you) fails to | | | | of the offer. In the above the example if the |
| perform as promised. | | | | man with the blue car says "yes" to the $5000 |
| A court can either award damages or force the | | | | offer then that is an an acceptance. Note if the |
| person to perform under the contract. This is | | | | man says he wants $5500 (i.e an extra $500) |
| called "specific performance". For a contract to | | | | then that is not an acceptance of the offer but a |
| come into existence it must have three elements. | | | | rejection and he has made a counter offer. |
| 1. An offer | | | | An Intention To Create Legal Relations |
| 2. An acceptance of that offer | | | | There must be an understanding between the |
| 3. An intention between the parties that the | | | | parties that they are creating a contract which |
| contract was meant to be legally binding | | | | can be upheld in the courts. If your neighbours |
| What's important to note is that the contract | | | | says they will lend you their lawnmower for the |
| does not have to be in writing!! If you agree a | | | | day on saturday and then they forget to bring it |
| contract verbally then that is ok. Lets look at | | | | around you probably can't sue your neighbour as |
| each component more closely. | | | | there was no intention to create legal relations. |
| An Offer | | | | This was one neighbour doing a favour to another. |
| There needs to be a clear offer from one person | | | | |