Part I. Part II. Part III. DIVISION B CONTRACTS The Formation of Contracts. Part IV. The Discharge of Contracts. THE FORMATION OF CONTRACTS § 33. Definition. CHAPTER 6 INTRODUCTORY § 34. Essential elements in contracts. § 35. Kinds of contracts. § 33. (Contracts, Sec. 1.) Definition. Case 18. Sir William R. Anson, Principles of the English Law of Contracts (Knowlton's Edition), pages 1 to 10. Contract results from a combination of the two ideas of Agreement and Obligation. Contract is that form of Agreement which directly contemplates and creates an Obligation: the contractual Obligation is that form of Obligation which springs from Agreement. Agreement requires for its existence at least two parties. There may be more than two. ** * * The inten The parties must have a distinct intention common to both. The parties must communicate to one another their common intention. tion of the parties must refer to legal obligations. It must have reference to legal rights and du * * seems ties as opposed to those of a social character. The consequence of Agreement must affect the parties themselves. But Agreement to be a wider term than contract. It includes acts in the law of two kinds besides those which we ordinarily term Contracts. These are: (1) Agreements the effect of which is concluded so soon as the parties thereto have expressed their common consent. Such are conveyances and gifts (2) Agreements which create obligations incidental to transactions of a different and * wider sort. Marriage for instance, So, too, a settlement of property in trust. These obligations are the result of Agreement, yet they are not Contract. Obligation is a legal bond whereby constraint is laid upon a person or group of persons to act or forbear on behalf of another person or group. And so we are now in a position to attempt a definition of contract, or the result of the concurrence of Agreement and Obligation. And we may say that it is an Agreement enforceable at law, made between two or more persons, by which rights are acquired by one or more to acts or forbearances on the part of the other or others." Question 18: Define a contract. What are the "two ideas" from which contract results? (Note to Case 18: "A contract is a promise, or set of promises, to which the law attaches legal obligation. This definition may seem somewhat unsatisfactory since it is necessary subsequently to define the circumstances under which the law does in fact attach legal obligation to promises, but in order to make a definition which should state these circumstances it would be necessary to compress the whole law of the formation of contracts into a sentence, which is impossible. The definition given at least makes clear that the obligation of a contractor is based on a promise made by him." Williston, Contracts, 1920 Vol. 1, p. 1.) § 34. (Contracts, Sec. 2.) Essential elements in contracts. (Note: To have a contract of any kind, we must have certain elements. To have a particular kind of contract (e. g., a negotiable instrument, a deed), we must have additional elements. What are those elements that are basic-common to all contracts? They have been differently stated, but it appears to the editor that they are correctly stated as follows: 1. Parties having capacity to contract. 2. An agreement between parties (or Offer and Acceptance). 3. Consideration (or, in Formal Contracts, Form). 4. Legality. |