Ai Hong vs Wang Law Case

1985 Words8 Pages
The word ‘Contract’ came from the Latin word ‘contrahare’ which means to draw or be drawn together. (dictionary.com, 2012) In general sense, “a contract is an agreement between two or more persons (individuals, businesses, organizations, or government agencies) to do, or to refrain from doing, a particular thing in exchange for something of value.” (law.freeadvice.com, 2012) Even though the definition mentioned above explains the basic features of a contract, but in wider sense there are two broad types of legal definitions of contract which are different from each other and explains different meanings. The first explains the contract in terms of a promise or set of promises which the law will enforce whereas the other explains the contract in terms of an agreement. When two or more parties agree to deal with each other, they then enter into an agreement. However, entering into an agreement does not necessarily mean creating a contract. For turning an agreement into a contract, both the parties must plan to have legal effects on each other so that if any of them breach the contract could take legal steps on each other. The fact of agreement, consideration, intention to create legal relations, consent, capacity and the requirements of certainty and completeness are the elements of contract formation. But the main steps towards formation of a contract are agreement and consideration. However sometimes it is said that there is a third element known as Intension where legal relation is to be created between the parties. Agreement is one of the key elements of contract formation as it transforms negotiations into a deal. “In cases where the existence of an agreement is in question, the traditional method for resolving it is to apply the rules of offer and acceptance.” (Radan & Gooley, 2012) The other core element of contract formation is consideration. It is divided
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