Advice On Conditions Of A Valid Contract

by fahd87

posted on 10/26/2009

A contract is made by proposal and acceptance, if the latter unconditionally corresponds with the former. If no time is prescribed for acceptance, it must be communicated within a reasonable time. If the proposal is made by correspondence, acceptance is complete against the proposer when the acceptance is posted, but against the acceptor only when it reaches the proposer, so that the proposer may revoke until the acceptor has posted his letter, and the acceptor may revoke his acceptance if he sends a telegram which reaches the proposer before his letter.
The promise of each party is the consideration for the other party, but the only promises without consideration which are enforceable in law are a promise in registered deed to do something for a near relation, a promise in writing to pay a time-barred debt, and a promise to compensate a person who has done something which the promisor was legally bound to do.
A contract is voidable at the option of a person whose consent has been secured by coercion (i.e., a threat to do an act punished by the penal code or to detain property), or by undue influence (i.e., by taking unfair advantage of a situation in which it is possible to dominate the will of the person consenting), or by fraud or by misrepresentation. A contract is void if its object or consideration is unlawful, fraudulent, immoral, or opposed to public policy, or if it was entered into under a mutual mistake of fact essential to the agreement. A party rescinding a voidable or void contract must restore any benefit he has received, and the other party is absolved from performance.
If a contract is broken, the party at fault must pay compensation for any injury naturally arising out of the breach, or which the parties knew, at the time of making the contract, was likely to result from the breach. If the contract specifies a sum as payable in case of breach, the party at fault must pay reasonable compensation not exceeding the stipulated amount.

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