Btec Unit 21 Pass 2 Essay

2924 Words May 23rd, 2013 12 Pages


PASS 1 & 2

Jane AKINYEBO 21107


A contract is a binding agreement between two or more businesses/people. A contract could be either written or verbal.

There are two different ways to classify contracts;

A) Broadly into:

1) Contracts by deed – A formal legal document signed, witnessed and delivered to create a legal obligation or contract.

2) A Simple Contract – Any contract which is not by deed is referred to as a simple contract,
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By contrast, if a person who signs a document believing it to be a contract does not read the terms and conditions that person will -tbe bound by the contract and will not be entitled to plead mistake.

Other factors may also be relevant to a successful plea of mistake. For instance, whether or not the defence of mistake will be allowed often depends on whether an innocent third party will be adversely affected by a decision that the contract is non-binding. Again, if the signer was careless and failed to take reasonable precautions, the defence will not be allowed to succeed. For these reasons, it is wise to seek legal advice about whether or not a court would hold the contract binding on these grounds.

◾false statements - There are statements that might be made by parties contracting with each other. False statements might be made where either:

a. The parties come to agree and contract because one of them has been motivated to agree by a statement said or written that is not true.

b. The parties have agreed and there is a contract, but the statements or terms in the contract exist only because one of the parties has made a false statement.

There are three types of false statements:

◾fraudulent misrepresentation - To prove fraud, it is necessary to

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