Contract law Assignment Sample

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Introduction of Contract law Assignment

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This report mentions about rule of privity of contract and its exceptions. Some valid essentials of valid contract so they can help to decide whether in the case there is any valid contract or not. This can only be examined by implementing the essential elements. There is a case study is also given and some questions are also discussed regarding that case. Some advice is also made for that case and identified whether there is any valid contract or not. There is also explained the meaning of invitation to offer and some elements of it. So, in this manner, this report mentions the contract and its essential elements for a valid contract, rule of privity contract, rule of the entire performance, and its exceptions.

Rule of privity of contract

This kind of rule states that parties related to the contract can only implement the terms of that contract. According to the common law, any other party who is not related to the contract can enjoy any benefit from the contract and no responsibility can arise for that person or party. Under this rule of contract, only the parties related to the contract can sue each other, and not any other person or beneficiary can sue for claims. (Mwesigwa, R., 2020) This rule protects the rights of the party who is related to the contract so no one can harm his rights. So, this rule of privity of contract implies that the related party can only get benefits from the contract (Armour and Enriques, 2018).

Explain whether past consideration amounts to good consideration

Past consideration means any act that is done before the execution of any contract. It is the consideration that is already paid by the party and the other party can not induce for the payment. (Wilhelmsen, T.L., 2018) According to the British law passed consideration is not a good consideration but in other countries, it is also considered a good consideration. It is like a promise that is made after the promise has been performed. There is a promise is to be made for an act done without any promise from another party. For any contract, consideration is a must for its enforcement as it is mandatory to receive any benefit from the contract. It is different from the general consideration as it is paid after the promiser's promise. There is only executory and executed considerations are recognized under common law. (Florez Pelaez, J., 2021) The concept of past consideration would be rejected in English law. In any contract, there are both the parties who made the contract mutually and decide their responsibilities. The promise is necessary for any contract and any consideration must be moved with only the promise. Consideration must be sufficient but need not be adequate according to the law there should be some value of consideration even any small value can be placed for any consideration. In exchange value, it should be sufficient. (Obadina, I., 2019.)

Identify three of the exceptions to the entire performance rule from Cutter v Powell

There is a famous case study named Cutter v Powell under this Mr. Cutter, a mariner, was recruited for a journey and given a promissory note from his work that ten days after the boat shows up at Liverpool, he will pay Mr. Cutter a specific total, "gave he continues, proceeds and carries out his responsibility as the second mate in said transport from henceforth to the port of Liverpool." Mr. Cutter started cruising the boat as the second mate for around a month and a half, yet kicked the bucket before its appearance in Liverpool. Mr. Cutter's significant other brought an activity for a proportionate piece of his due compensation for the significant measure of the journey on which he went about as the second mate. These are some facts of this case (avelyev, 2017).

Privity of the contract states that only parties related to the contract can sue each other and implied their rights and liabilities. Even if the contract is personal to that person, no other third party can claim rights or impose responsibilities. This rule is founded on the interest principle, which states that only those who have a legal interest in the contract are authorised to protect their rights. There are some fundamentals of contract privity, such as the fact that a contract can only be made between two persons. Parties must be capable and there must be valid consideration for this criterion to apply. The breach of contract by any party is also an essential element of this rule. Under this rule, only parties to the contract can sue each other (Papantoniou, 2020).

Meaning of contract

The contract can be explained as a promise that is enforceable by law. This promise can be relayed to do something or not to do something. For completion of any contract, there is mutual assent of two or more parties is necessary and under this one party offers and another party must accept the offer. Simply it is the agreement between two or more persons to do something or refrain from doing anything. Any contract can be a valid contract if it is an agreement and binding on the parties related to the contract. Under the valid contract, parties are legally binding. For completion of any contract, there should be an adequate and unqualified agreement to an offer and there should be accepted without any variations (Medway, et. al., 2018).

Essentials of a valid contract

The contract merely states that one side has made an offer, which has been accepted by another party. Any successful contract must include the following elements: offer, agreement, consideration, intent to create legal duties, legality and competence, and certainty. These can be summarised as follows:

Offer: it can be analyzed from the contract law and it is also very essential to form any contract valid. Under the offer, one party proposes an agreement with some terms and conditions to another party and it is also essential for enforceability of the contract. There is another term named invitation to offer and there should be an adequate difference between offer and invitation to offer. Offer is considered as an essential element for the valid contract on the other hand invitation to offer is not considered as an essential element for its formation. Along with this offer can be accepted but an invitation to offer does not show the willingness to accept any offer and parties are not bound to accept the invitation to offer. So, these are some differences that can easily distinguish the offer and invitation to offer (Taghizadeh, et. al., 2017).

Acceptance: it is like an agreement to the specific terms of an offer. It is not compulsory that an offer can only be accepted through words even it can be asserted with conduct only. If any party offer to any other person and that person does not accept the offer but make a further offer for a first person then it would be said as a counteroffer. It will constitute a counter offer in this condition. Generally, acceptance must be communicated to the offeror. Under the valid contract, silence is not considered acceptable. But there are some exceptional situations where silence can also be accepted as valid acceptance (Hsiao, 2017).

Intention to create legal relations: according to this parties related to the contract merely do not accept the only agreement and its conditions but some essential conditions should also be accepted by parties. If parties assent with the subject to contract but never agree with the conditions and terms of the contract (Pargendler, 2018).

Consideration: An advantage to the person who agreed to fulfil particular duties is referred to as consideration. It can also refer to the individual who wishes to enforce the duty or who stands to gain from the promise. It is not necessary that the consideration be adequate, but it must be sufficient (Djurovic and Janssen, 2018).

Legality and capacity: any contract can be treated as illegal if an agreement purports any illegal purpose. Certain contracts are unenforceable because they are immoral and against public policy.

Certainty: according to the valid contract certainty is also an essential element. Parties must reach an agreement on the essential conditions with some reasonable care and certainty. Due to the absence of this element the contract can also fail (Klee, 2018).

In the given case the person named Arthur made an advertisement in the antique tickers magazine on 1st may be offered an Antique Rolex watch for sale for price $15000 and he has also provided his contact details and postal, email address. Ben was the first person who showed his willingness to purchase that watch and on 4th may be sent an intimation letter to Arthur and contended that he would purchase that watch for the same price that was mentioned in the advertisement. On 5th may Christine saw the advert and contended that he would purchase the watch for $11000. But when he mailed his intention to Arthur then he replied that he would accept $13000 for this. After this Christine also replied that she can only pay the $11000 and the balance amount will be paid by her at the end of the month. (Maja, I., 2019.)

After this on 6th May firstly Dennis is another person who responded to Arthur and showed his intention to purchase the watch. And on this Arthur replied he can only sell it for $13000. After some time, Christine again replied that she had managed to raise the balance amount and she can pay $13000 as discussed with him. Along with this Dennis also made replied to Arthur's mail and said that he is agreed to pay the $13000 as requested or demanded by Arthur. On 7th may Ben's letter has also arrived at Arthur. It can be advised according to the contract law that which deal can be made as a valid contract for the sale of the watch. In the abovementioned report, all explanations regarding the essential elements of a valid contract and its meaning are described properly. (v Beswick, B.,)

So, according to these essential elements of a valid contract, it can also be analyzed that the deal made by Christine and Ben is treated as a valid contract. Because offer, acceptance, consideration, intention to create legal intention, consideration, legality and capacity, and certainty are some essential elements for the formation of any valid contract. In this case, Christine made the valid contract as the offer was made to him and he accepted the offer and conveyed his intention to purchase or acceptance to Arthur after this consideration was also discussed between them and decided an adequate amount and both of them agrees on that. Christine has also agreed to pay the same amount and he accepted all conditions related to the contract. So, there can be a valid contract between them. (Todd, P., 2019)

Along with this, Mr. Dennis has also made a valid contract as an offer was made to him and he accepted the offer made by Arthur and replied to him intending to purchase that watch at that same price that was requested by Arthur and it was adequate and mutually decided consideration between both the parties so, it can also be treated as a valid contract. And all other deals do have not all essential elements of a valid contract so, they cannot make any valid contract. (enea, A.G., 2020.) It is necessary to follow all the essential elements of a valid contract. Invitation to offer is also made in some deals in this case. (Fita Ortega, F., 2020)


It can be concluded from the abovementioned report that there should be some essential elements for making a valid contract. Offer, acceptance, intention to create a legal obligation, consideration and legality and capacity, legality are some essential elements that should be followed under any valid contract. No contract can be made valid without following an element. In this report privity of contract and rule of entire law is described as well and exception to this rule is also explained as above. It also mentioned in the report that in what circumstances past consideration is considered as good and bad, privity of contract rule provides some rights, benefits, and obligations to persons who are related to contract not any other person. Even any other third party is not considered to get any benefit from the contract whether the contract is made for him. This is the rule of privity of contract. So, in this manner, some rules of contract and valid contract, its essentials and invitation to offer is explained in the report.


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Armour, J. and Enriques, L., 2018. The promise and perils of crowdfunding: between corporate finance and consumer contracts. The Modern Law Review81(1), pp.51-84.

Djurovic, M. and Janssen, A., 2018. The formation of blockchain-based smart contracts in the light of contract law. European Review of Private Law26(6).

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Maja, I., 2019. Reflecting on the applicability of freedom, sanctity and privity of Contract in Zimbabwean Law Of Contract. University of Zimbabwe Law Journal2(1), pp.172-180.

Medway, D., Roper, S. and Gillooly, L., 2018. Contract cheating in UK higher education: A covert investigation of essay mills. British Educational Research Journal44(3), pp.393-418.

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Obadina, I., 2019. A Comparative Overview of the application of Privity of Contract and the Continuing Liability of the Original Lessee. The Journal of Private and Property Law, Abia State University, Nigeria2(1), pp.110-129.

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