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    Introduction To Business Law: Type Author Names Here Lucy Jones

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    William Mushonga
    This document provides an overview of key concepts in business law related to contractual agreements, including: intention to create legal relations; contractual capacity; consideration; and privity of contract. It examines relevant cases that helped establish principles for what makes an agreement legally binding and how third parties' rights and past consideration affect enforceability. The document aims to introduce foundational elements of how the law approaches formation and obligations within business contracts.

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    Introduction To Business Law: Type Author Names Here Lucy Jones

    Uploaded by

    William Mushonga
    63 views14 pages
    This document provides an overview of key concepts in business law related to contractual agreements, including: intention to create legal relations; contractual capacity; consideration; and privity of contract. It examines relevant cases that helped establish principles for what makes an agreement legally binding and how third parties' rights and past consideration affect enforceability. The document aims to introduce foundational elements of how the law approaches formation and obligations within business contracts.

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    This document provides an overview of key concepts in business law related to contractual agreements, including: intention to create legal relations; contractual capacity; consideration; and privity of contract. It examines relevant cases that helped establish principles for what makes an agreement legally binding and how third parties' rights and past consideration affect enforceability. The document aims to introduce foundational elements of how the law approaches formation and obligations within business contracts.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    63 views14 pages

    Introduction To Business Law: Type Author Names Here Lucy Jones

    Uploaded by

    William Mushonga
    This document provides an overview of key concepts in business law related to contractual agreements, including: intention to create legal relations; contractual capacity; consideration; and privity of contract. It examines relevant cases that helped establish principles for what makes an agreement legally binding and how third parties' rights and past consideration affect enforceability. The document aims to introduce foundational elements of how the law approaches formation and obligations within business contracts.

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    You are on page 1of 14

    Lucy

    Type Jones
    author names here

    Introduction to Business Law

    Chapter 5

    © Oxford University Press, 2015. All rights reserved.


    Jones: Introduction to Business Law
    Intention to Create Legal Relations

    Jones: Introduction to Business Law


    Simpkins v Pays (1955)

    • Mrs Pays, her granddaughter and lodger


    enter into a competition each week.
    • They agree to share any prizes.
    • Entries are sent in Mrs P’s name.
    • One week they win £750. But Mrs P refuses
    to share money with lodger.
    Decision: From facts there was an intention to
    enter into legal relations - lodger entitled to
    1/3rd of winnings.

    Jones: Introduction to Business Law


    Commercial/Business Agreements

    Presumed parties intend agreement to be


    legally binding unless:
    • Agreement states it is not binding or
    • Party seeking to have agreement set aside
    can show that at the time the agreement was
    made there was no intention that it should be
    legally enforceable.

    If the commercial/business agreement is ambiguous


    an intention to create legal relations will be
    presumed. Edwards v Skyways (1964).

    Jones: Introduction to Business Law


    Contractual Capacity

    • Capacity to enter into contracts may be


    limited where one of the parties is:
    • A minor
    • Intoxicated
    • Mentally impaired
    • A corporation acting outside its powers.

    Jones: Introduction to Business Law


    Contractual Capacity: Minors

    Jones: Introduction to Business Law


    Consideration

    • In order for a contract to be legally


    enforceable there must be an exchange of
    consideration (the law does not enforce
    gratuitous promises unless made under
    deed).
    • The consideration provided by each party
    must have some value but need not be of
    adequate value i.e. the law is not concerned if
    one party makes a poor bargain.

    Jones: Introduction to Business Law


    Value of Consideration

    Even items which Chappell v Nestle (1966)


    are disposed of by Chocolate wrappers
    one parties as sent to Nestle could
    having no value amount to part of the
    may represent consideration for a
    valuable legal record, as Nestle
    consideration. benefitted the sales of
    chocolate which may
    not otherwise have
    been sold.

    Jones: Introduction to Business Law


    Past consideration
    Re McArdle (1951)
    • Consideration • Mr. M died and left his house
    given before a to Mrs M and then to their
    contract is children in equal shares.
    completed (past • Daughter-in-law, (D) made
    consideration) is house improvements costing
    not adequate for £488.
    a binding • After improvements made all
    contract. children signed agreement
    that they would reimbursed D
    when Mrs M died.
    • Decision: Agreement was
    after work done and was not
    legally enforceable D could
    not claim reimbursement.

    Jones: Introduction to Business Law


    Consideration must be sufficient

    • Performance of a public duty:


    • A party to a contract cannot use what they are
    required to do as a public duty as
    consideration in a contract, Collins v
    Godefroy (1831).
    • But if they do more than their public duty that
    can amount to good consideration, Glasbrook
    Bros v Glamorgan CC (1925).

    Jones: Introduction to Business Law


    Contractual Duties in existing contracts:
    Williams v Roffey Bros (1990)

    Jones: Introduction to Business Law


    Privity of Contract

    Jones: Introduction to Business Law


    Contracts (Rights Of Third Parties)
    Act 1999
    • Persons who are not party to a contract can
    sue for their rights under the contract:
     where the contract expressly permits enforcement
    by third parties or
     where the purpose of the contract is to benefit the
    third party (unless clear that the contract did not
    intend to create rights for third parties).
    • A person need not be in existence at time
    contract was made to gain rights under it.

    Jones: Introduction to Business Law

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