Business Law

M B A- P
D R. A Z H A R H A S S A N
SPRING 2017
Consideration
That which is actually given or accepted in return for a promise.
Some right , interest, profit or benefit accruing to one party , or
some forbearance , detriment , loss or responsibility given , suffered
or undertaken by the other.
Consideration is executed when the act consisting of the
consideration is performed ; it is said to be executory when it is in
the form of promises to be performed at a future date.
Consideration is required for the formation of all simple contracts.
Consideration

It must be legal ; it must not be past; it must move from the

promisee; it must be real , i.e something of value in the eye
of law.
Offer

A proposal, written or oral , to give or do something ,for example to

enter a legally binding contract on specified terms. It may be
expressed or implied from conduct. The person making the offer is
the offeror; the person to whom it is made is the offeree.
Offer
General rules are
1) An offer may be made to a definite person, definite class of persons or the
world at large;
2) An offer must be communicated to the offeree before acceptance;
3) It is only made when it reaches the offeree, not when it might have reached
in ordinary course of post.
Where negotiations become a definite offer and only requires acceptance to
make it into a binding contract there is said to be a firm offer.
Counter Offer

Response of an offeree which , In effect , suggests and agreement or

terms which differ from those of the original offer.
Cross Offer

Offers which cross ,e.g., in the post.

Example: A and B discuss the sale and purchase of As motor car; A
then writes to B offering to sell the car for Rs 10,000 , and
simultaneously , B writes to A offering to buy it for Rs 10,000.
Void
Empty; without force; of no legal effect.
A void contract is a paradox; in truth there is no contract at all. It is a nullity from its
beginning.

Voidable
Capable of being voidable i.e, set aside.
A voidable contract has legal effect until avoided at the option of one of the parties
(e.g, where the contract has been induced by misrepreseantaion)
Invitation to Treat
An offer to receive an offer.
According to the ordinary law of contract the display of an article
with a price on it in the shop window is merely an invitation to treat.
It is in no sense an offer for sale; the acceptance of which constitutes
a contract.
Acceptance
Acceptance of an offer to create a contract (i.e, an assent to all the
terms of an offer) must be unqualified , and maybe by words or
conduct.
It must generally be communicated to the offeror and must conform
with the prescribed or indicated terms of the offer.
Conditional Contract
An agreement , the operations of which is dependent on the
occurrence of an uncertain event.