CONTRACT LAW

2.1 Demonstrate understanding of Contract Law in

tourism and hospitality industry.
2.1.1 Define the meaning of terminologies in Contract
Law.
2.1.2 Discuss the fundamental elements of Contract Law.
2.1.3 Describe the implication of Contract Law to tourism
and hospitality business activities.
2.2 Describe the legal consequences and liabilities for
breach of contract

INTRODUCTION
Contract in legal sense- agreement between 2 or more parties that
is legally binding between them
S 2(H) CA- agreement enforceable by law
Offe
r
Acceptan
ce

Capacit
y
Elements
of
contract
Certainty
Intention to
create legal
relation

Considerati
on

OFFER
S2(a) CA- when a person shows his willingness to do something or
abstain (stop) from doing something, in exchange for something of
value
Is a proposal to exchange promise
May be implied, express
Person making offer- offeror/ proposer/ promisor
Person receive offer- offeree/ promise

TYPES OF OFFER
Unilateral offer- no specific offeree in mind (general public)
Bilateral offer- offeree is identifiable (definite person/class of person)
CARLILL V CARBOLIC SMOKE CO LTD(1893) QB 256
D was an owner of medical shop, advertised the medicine that claimed to
heal all disease and offer to pay 100 if anyone not recover after take the
medicine. P bought it, consume but dont recover. P asked for claim but D
denied.
Court Held that offer is valid to all world, so D must pay to P

COMMUNICATION OF OFFER
Offer must be communicated to offeree before can be accepted.
S4(1) proposal is complete when it comes to the knowledge of the
person to whom its made

TERMINATION OF OFFER
Once open, remains until it lapses or withdrawn
S5(1) proposal may be revoked any time before the communication
Lapses
of time

Failure of the
acceptor to
fulfill condition

S6 CA

Communication
of notice

Death/mental
disorder

REJECTION, COUNTER
OFFER,ITT
REJECTION
Offeree communicates his rejection
COUNTER OFFER
Acceptance with modification
Operates as rejection of original offer
INVITATION TO TREAT
Non binding statement/conduct that invites interest
FISHER V BELL (91960)3 ALL ER 731
D displayed flick knife with price tag. Later he been charged under
Restriction Offensive Weapon Act.
Court Held: displaying not amount to offer. Its merely invitation to treat

ACEPTANCE
S2(b)- when person to whom the proposal is made signifies his assent
thereto.
Agreement existed when offer accepted
Postal rule

DISCUSSION 1
In your own group, set up a mini drama that
shows the application of element of offer,
invitation to treat and acceptance of contract in
real life.
Your drama must include and apply all the
elements of contracts that you have learned
before.
10 minutes for each group

CONSIDERATION
S26 CA- agreement without consideration is void
Something value exchanged for something else in value

TYPES OF CONSIDERATION

Cont..

LEGAL CAPACITY
S10 CA- all agreement are contract if made by free consent of parties
(competent to contract)
WHO ARE COMPETENT?
Age of majority
Sound mind
Not disqualified from law

CERTAINTY
S30 CA- Agreement void for uncertainty
Term of agreement must certain and not vague

VOIDABLE CONTRACT

INSIST RIGHT
POSITION

BENEFIT
RETURNED

VOID CONTRACT

DISCHARGE OF CONTRAC T

REMEDIES

Q&A