Contract formation

I’ll begin by telling you about contract formation.

An enforceable contract is composed to an offer, an acceptance and consideration. Moreover, a contract must contain essential terms such as the price and the subject matter. However, courts will enforce a vague or indefinite contract under certain circumstances. Furthermore, an enforceable agreement may be manifested in either written or oral words, here it’s an express contract, or by conduct or some combination and words, here it is an implied contract. The formation of a contract can be attacked, for example, illegality of the subject matter, fraud in the Inducement, duress and the lack of legal capacity to contract. In some cases, individuals or companies who are not a party to a particular contract may nevertheless have enforceable rights under the contract. That’s all I have to say about the introduction to contract formation.

Now, I move on the key terms of defences to contract formation.

Firstly, we are talking about illegality of the subject matter when either the subject matter, for example the sale of illegal drugs, or the consideration of a contract is illegal. Secondly, there is fraud in the inducement when one party is intentionally misled about the terms, quality or other aspect of the contractual relationship that leads the party to enter into the transaction. Thirdly, there may be a duress when one party induces another into entering into a contract by use or threat of force, violence, economic pressure or other similar means. Lastly, we’re talking about lack of legal capacity when one party does not have the ability to enter into a legal contract.

Let me turn now to the different types of contract clauses.

First of all liquidated damages is clause referring to an amount predetermined by the parties as the total amount of compensation a non-breaching party should receive if the other party breaches a part of the contract. Then, acceleration is clause in a contract requiring the obligator to pay all or a part of a payable amount sooner than as agreed upon the occurrence of some event or circumstance stated in the contract, usually failure to make payment. Next, force majeure is clause designed to protect against failures to perform contractual obligations caused by unavoidable events beyond the party’s control, such as natural disasters or wars. Then, assignment is clause prohibiting or permitting assignment under certain conditions. Then, termination is clause outlining when and under which circumstances the contract may be terminated. Finally, entire agreement is clause stating that the written terms of an agreement may not be varied by prior or oral agreements because all such agreements have been consolidate into the written document

For today that's all I have to say about contract formation although there is anything else to add.

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