WHAT YOU NEED TO KNOW ABOUT THE LAW OF CONTRACTS

Many are times we get into engagements with people some who we know, some who we don't know. We make agreements and deals be it with our siblings, parents, friends, employers and  employees be it the hand bag your friend promised or that car your father promised or ever the undertaking your boss made to increase your salary at the end of the month. However are you aware of the legal implications of these agreements? Do you know the Difference between an agreement and a contract? Here is some food for thought.

A contract is a form of an agreement that can be enforced by the law. hence for an agreement to amount to a contract it has to be one which is recognized in law. Therefore an agreement between parties where one of the parties is a minor will not be deemed to be a valid contract.

For a contract to be deemed as valid, there are elements which it must contain which elements I shall now discuss. First and fore most as stated above, a contract is a form of an agreement. Hence for a contract to be made there must be an agreement between two or more parties, that is the offerer(s) and the acceptor(s). The offerer makes an offer and the offerree (acceptor) indicates acceptance of the offer. when the offer and the acceptance correspond in every respect, an agreement is made.

Secondly, the parties must intend their agreement to result in legal relations. The parties must therefore intend that if one of them fails to fulfill a promise undertaken by the agreement, he shall be answerable for that failure in law. therefore a promise to but your friend lunch may not be legally enforceable though you may be under a social obligation to fulfill such a promise.

Thirdly but most importantly, there must be consideration. this is the most important element of a contract. without consideration, the contract is null and void. Consideration is a benefit received by a party who gives a promise or performs an actor some detriment suffered by a party who receives a promise. being that it is the offerer who makes the promise, it is upon the acceptor to suffer a detriment. Therefore it is for the acceptor to give consideration to the offerer. in Currie vs Misa, the court defined consideration as some right, benefit, interest or profit accruing to one party or some forbearance detriment loss or responsibility given, suffered, undertaken by the other. the benefit accruing or the detriment sustained must be in return of a promise given or received.

An example of consideration would be the price you pay say for a car. The car dealer (offerer) makes an offer to sell you the car at a profit accruing to him. You the purchaser (acceptor) accepts to buy the car and suffer a detriment when you pay the price of the car. The seller therefore enjoys a benefit of interest and the purchaser suffers the price he pays to get the car.

One other valuable information about consideration is that whereas it must be given, it need not be adequate. Consideration must be of some value but it need not be adequate. What this means is that say the seller undervalues the price of the car, once the seller sells the car to the buyer, he cannot claim for more money or claim that the purchaser did not pay the right price. For as long as the Purchaser has paid the price of the car and that the price is considered to be of value, it does not matter that that is not the original price of the commodity hence there is consideration.

Further, note that a promise to perform an existing obligation is not sufficient consideration however a promise to do something different is good consideration. Therefore you cannot offer to do what you ought to do in consideration for something else. Say you take a loan from a bank you cannot say that you will repay that loan on grounds that the bank grants you another loan. this is because you are obliged to pay the first loan regardless.

Fourthly, the parties must have the capacity to contract. One can therefore not enter into a contract with a minor or with a lunatic. Where one enters into such a contract, the minor or lunatic is not under any obligation to fulfill his part of the contract. However a minor may enter into a contract for neccessaries. Neccessaries include food, clothing, shelter, education and the like. Where say a minor takes flour from a shopkeeper because he need it and promises to pay, the minor is under an obligation to pay for the flour. If however he did not need the floor and perharps just wanted to play with it, then he is not obliged to pay. it is upon the adult entering into contract with the minor to determine whether the minor's need is a neccessary.

Finally the reality of the contract must not be affected by circumstances which render the contract unenforceable, voidable or illegal. Hence a contract made to perpetrate illegal actions such as illegal sale of ammunition or sale of prohibited drugs cannot be enforced.

So there you have it. The next time you make that promise, you will know whether it is binding or not. Whether it is a contract or a mere agreement.