Discuss the Contractual terms for binding contract of family and social matters

“Discuss the Contractual terms for binding contract of family and social matters”


Actually, law of contract is an agreement entered into voluntarily by two or more parties, each of whom intends to create one or more legal obligations between or among them. The elements of a contract are offer and acceptance by competent persons having legal capacity who exchanges consideration to create mutuality of obligation, and, in some circumstances, do so in writing. Proof of some or all of these elements may be done in writing, though contracts may be made entirely orally or by conduct. At law, the remedy for breach of contract can be “damages” or compensation of money. In equity, the remedy can be specific performance of the contract or an injunction. Both of these remedies award the party at loss the “benefit of the bargain” or damages. The parties may be natural persons or juristic persons. A contract is a legally enforceable promise or undertaking that something will or will not occur. The word promise can be used as a legal synonym for contract. Regarding Australian Contract Law for example, there are 40 relevant acts which impact on the interpretation of contract at the Commonwealth level, and an additional 26 acts at the level of the state of NSW. In addition there are 6 international instruments or conventions which are applicable for international dealings, such as

Providing family and social matters by origin and scope

Contract law is based on the principle expressed in the Latin phrase pacta sunt servanda, which is usually translated “agreements must be kept” but more literally means “pacts must be kept”.Contract law can be classified, as is habitual in civil law systems, as part of a general law of obligations, along with tort, unjust enrichment, and restitution. In American English, the term extends beyond the legal meaning to encompass a broader category of agreements. This article mainly concerns the common law. Such jurisdictions usually retain a high degree of freedom of contract, with parties largely at liberty to set their own terms. This is in contrast to the civil law, which typically applies certain overarching principles to disputes arising out of contract, as in the Code. However, contract is a form of economic ordering common throughout the world, and different rules apply in jurisdictions applying civil law (derived from Roman law principles), Islamic law, socialist legal systems, and customary or local law.

Providing family and social matters elements

At common law, the elements of a contract are offer, acceptance, intention to create legal relations, and consideration.

Providing family and social matters mutual assent

At common law, mutual assent is typically reached through offer and acceptance, that is, when an offer is met with an acceptance that is unqualified and that does not vary the offer’s terms. The latter requirement is known as the “mirror image” rule. If a purported acceptance does vary the terms of an offer, it is not an acceptance but a counteroffer and, therefore, simultaneously a rejection of the original offer. The Uniform Commercial Code notably disposes of the mirror image rule in § 2-207, although the UCC only governs transactions in goods in the USA.

4.Hans Wehberg, Pacta Sunt Servanda, The American Journal of International Law, Vol. 53, No. 4 (Oct., 1959), p.775.; Trans-Lex.org Principle of Sanctity of contracts

5.2008 Merriam-Webster online dictionary

Providing family and social matters offer and acceptance

The most important feature of a contract is that one party makes an offer for an arrangement that another accepts. This can be called a concurrence of wills or consensus ad idem (meeting of the minds) of two or more parties. The concept is somewhat contested. The obvious objection is that a court cannot read minds and the existence or otherwise of agreement is judged objectively, with only limited room for questioning subjective intention: see Smith v. Hughes.  Richard Austen-Baker has suggested that the perpetuation of the idea of ‘meeting of minds’ may come from a misunderstanding of the Latin term ‘consensus ad idem’, which actually means ‘agreement to the thing’.  There must be evidence that the parties had each, from an objective perspective, engaged in conduct manifesting their assent, and a contract will be formed when the parties have met such a requirement. An objective perspective means that it is only necessary that somebody gives the impression of offering or accepting contractual terms in the eyes of a reasonable person, not that they actually did want to form a contract. The case of Carlill v Carbolic Smoke Ball Company is an example of a ‘unilateral contract’. The term unilateral contract is used in contract law although ultimately there is an offered and an offered and a consideration (which may be an act), and in Australian Mills v The Commonwealth,  the High Court of Australia considered the term “unscientific and misleading”. Obligations are only imposed upon one party upon acceptance by performance of a condition. In the United States, the general rule is that in “case of doubt, an offer is interpreted as inviting the offered to accept either by promising to perform what the offer requests or by rendering the performance, as the offered chooses.

6.^ (1870-71) LR 6 QB 597

7. R. Austen-Baker, ‘Gilmore and the Strange Case of the Failure of Contract to Die After All’ (2002) 18 Journal of Contract Law 1

8.e.g. Lord Steyn, ‘Contract Law: Fulfilling the Reasonable Expectations of Honest Men’ (1997) 113 LQR 433; c.f. § 133 BGB in Germany, where “the actual will of the contracting party, not the literal sense of words, is to be determined”

9. [1893] 1 QB 256

10.< (1953) 92 CLR 424

11.Wilmot et al, 2009, Contract Law, Third Edition, Oxford University Press, page 34

12Restatement (Second) of Contracts § 32 (1981) (emphasis added)

Taking consideration for binding contract

Consideration is something of value given by a promissory to a promise in exchange for something of value given by a promise to a promissory. Typically, the thing of value is a payment, although it may be an act, or forbearance to act, when one is privileged to do so, such as an adult refraining from smoking. Consideration consists of a legal detriment and a bargain. A legal detriment is a promise to do something or refrain from doing something that you have the legal right to do, or voluntarily doing or refraining from doing something, in the context of an agreement. A bargain is something the promissory (the party making promise or offer) wants, usually being one of the legal detriments. The purpose of consideration is to ensure that there is a present bargain, that the promises of the parties are reciprocally induced. The classic theory of consideration required that a promise be of detriment to the promissory or benefit to the promise. This is no longer the case in the USA; typically, courts will look to a bargained-for exchange, rather than making inquiries into whether an individual was subject to a detriment or not. The emphasis is on the bargaining process, not an inquiry into the relative value of consideration.

Taking sufficiency for binding contract

Consideration must be sufficient, but courts will not weigh the adequacy of consideration. For instance, agreeing to sell a car for a penny may constitute a binding contract. Transfer of money is typically recognized as an example of sufficient consideration, but in some cases it will not suffice, for example, when one party agrees to make partial payment of a debt in exchange for being released from the full amount.  Past consideration is not sufficient. Indeed, it is an oxymoron. For instance, in Eastwood v. Kenyon,  Consideration must move from the promise. For instance, it is good consideration for person A to pay person C in return for services rendered by person B. If there are joint promises, then consideration needs only to move from one of the promises.

13. Chappell & Co Ltd v. Nestle Co Ltd [1959] 2 All ER 701 in which the wrappers from three chocolate bars was held to be part of the consideration for the sale and purchase of a musical recording.

14. The rule in Pinnel’s Case – Foakes v Beer (1884) 9 App Cas 605

15. Eastwood v. Kenyon (1840) 11 Ad&E 438

The situation of other jurisdictions

In the Roman law-based systems (including Scotland) do not require consideration, and some commentators consider it unnecessary—the requirement of intent by both parties to create legal relations by both parties performs the same function under contract. The reason that both exist in common law jurisdictions is thought by leading scholars to be the result of the combining by 19th century judges of two distinct threads: first the consideration requirement was at the heart of the action of assumption, which had grown up in the Middle Ages and remained the normal action for breach of a simple contract in England & Wales until 1884, when the old forms of action were abolished; secondly, the notion of agreement between two or more parties as being the essential legal and moral foundation of contract in all legal systems, promoted by the 18th century French writer Pothier in his Traite des Obligations, much read (especially after translation into English in 1805) by English judges and jurists. The latter chimed well with the fashionable will theories of the time, especially John Stuart Mill’s influential ideas on free will, and got grafted on to the traditional common law requirement for consideration to ground an action in assumpsit’s.<href=”#cite_note-21″>[17]

What kind of formation should take?

In addition to the elements of a contract:

  • a party must have capacity to contract;
  • the purpose of the contract must be lawful;
  • the form of the contract must be legal;
  • the parties must intend to create a legal relationship; and
  • the parties must consent.

As a result, there are varieties of affirmative defenses that a party may assert to avoid his obligation.

16. In Germany, § 311 BGB

17. For a detailed and authoritative account of this process, see A. W. B. Simpson, A History of the Common Law of Contract: The Rise of the Action of Assumpsit, (Oxford University Press: Oxford, 1975)

Affirmative defenses of family and social matters

Vitiating factors constituting defenses to purported contract formation include:

  • mistake;
  • incapacity, including mental incompetence and infancy/minority;
  • <href=”#In_contract_law” title=”Duress”>duress;
  • undue influence;
  • unconscionability;
  • misrepresentation/fraud; and
  • Frustration of purpose.

Such defenses operate to determine whether a purported contract is either (1) void or (2) voidable. Either party cannot ratify void contracts. Voidable contracts can be ratified.

What kind of invitation to treat

Where a product in large quantities is advertised in a newspaper or on a poster, it generally is not considered an offer but instead will be regarded as an invitation to treat, since there is no guarantee that the store can provide the item for everyone who might want one. This was the basis of the decision in Partridge v. Crittenden  a criminal case in which the defendant was charged with “offering for sale” bramble finch cocks and hens. The court held that the newspaper advertisement could only be an invitation to treat, since it could not have been intended as an offer to the world, so the defendant was not guilty of “offering” them for sale. Similarly, a display of goods in a shop window is an invitation to treat, as was held in Fisher v. Bell another criminal case which turned on the correct analysis of offers as against invitations to treat. In this instance the defendant was charged with “offering for sale” prohibited kinds of knife, which he had displayed in his shop window with prices attached. The court held that this was an invitation to treat, the offer would be made by a purchaser going into the shop and asking to buy a knife, with acceptance being by the shopkeeper, which he could withhold.

18. [1968] 1 WLR 1204

19. [1961] 1 QB 394

How could be helped by third parties

The doctrine of privities of contract means that only those involved in striking a bargain would have standing to enforce it. In general this is still the case, only parties to a contract may sue for the breach of a contract, although in recent years the rule of privities has eroded somewhat and third party beneficiaries have been allowed to recover damages for breaches of contracts they were not party to. In cases where facts involve third party beneficiaries or debtors to the original contracting party have been allowed to be considered parties for purposes of enforcement of the contract. A recent advance has been seen in the case law as well as statutory recognition to the dilution of the doctrine of privities of contract. The recent tests applied by courts have been the test of benefit and the duty owed test.

The way of formalities and writing

However, we know that an unwritten, unspoken contract, also known as “a contract implied by the acts of the parties,” which can be either implied in fact or implied in law, May also be legally binding. Contracts implied in fact are “real” contracts, that is, of no different remedy than “benefit of the bargain,” as mentioned above. However, contracts implied in law are also known as quasi-contracts, and the remedy is quantum merit, the fair market value of goods or services rendered. Oral contracts are ordinarily valid and therefore legally binding. However, in most jurisdictions, certain types of contracts must be reduced to writing to be enforceable. This is to prevent frauds and perjuries, hence the name statute of frauds. For example, an unwritten contract would be unenforceable if for the sale of land. In Australia and many, if not all, jurisdictions which have adopted the common law of England, for contracts subject to legislation equivalent to the Statute of frauds, there is no requirement for the entire contract to be in writing. Although for property transactions, there must be a note or memorandum evidencing the contract, which may come into existence after the contract, has been formed.

20. Trans-Lex.org: international principle

21. In Australia, it is known as the Sales of Goods Act in most states, and in Victoria the Goods Act 195

The importance of bilateral and unilateral contracts

Contracts may be bilateral or unilateral. A bilateral contract is an agreement in which each of the parties to the contract makes a promise or set of promises to the other party or parties. For example, in a contract for the sale of a home, the buyer promises to pay the seller $200,000 in exchange for the seller’s promise to deliver title to the property. In a unilateral contract, only one party to the contract makes a promise. Conditions precedent can also be attached to unilateral contracts, however. In unilateral contracts, the requirement that acceptance be communicated to the offeror is waived unless otherwise stated in the offer. The offeree accepts by performing the condition, and the offeree’s performance is also treated as the price, or consideration, for the offeror’s promise. The offeror is master of the offer; it is he who decides whether the contract will be unilateral or bilateral. In unilateral contracts, the offer is made to the public at large. A bilateral contract is one in which there are duties on both sides, rights on both sides, and consideration on both sides. If an offeror makes an offer such as “If you promise to paint my house, I will give you $100,” this is a bilateral contract once the offeree accepts. Each side has promised to do something, and each side will get something in return for what they have done.

What kind of uncertainty, incompleteness and severance may be happened

If the terms of the contract are uncertain or incomplete, the parties cannot have reached an agreement in the eyes of the law.<href=”#cite_note-37″>[22] In addition, the court may also imply a term; if price is excluded, the court may imply a reasonable price, with the exception of land, and second-hand goods, which are unique. If there are uncertain or incomplete clauses in the contract, and all options in resolving its true meaning have failed, it may be possible to sever and void just those affected clauses if the contract includes a severability clause. The test of whether a clause is severable is an objective test—whether a reasonable person would see the contract standing even without the clauses. The test of whether a clause is severable is an objective test—whether a reasonable person would see the contract standing even without the clauses.
22. Fry v. Barnes (1953) 2 D.L.R. 817 (B.C.S.C)

Contractual terms for binding contract of family and social matters:

A contractual term is “a provision forming part of a contract”.<href=”#cite_note-41″>[23] Each term gives rise to a contractual obligation, breach of which can give rise to litigation. Not all terms are stated expressly and some terms carry less legal weight as they are peripheral to the objectives of the contract.

(1) Setting aside the contract

There can be four different ways in which contracts can be set aside. A contract may be deemed ‘void’, ‘voidable’, ‘unenforceable’or ‘ineffective’. Voidness implies that a contract never came into existence. Voidability implies that one or both parties may declare a contract ineffective at their wish. Unenforceability implies that neither party may have recourse to a court for a remedy. Ineffectiveness implies that the contract terminates by order of a court where a public body has failed to satisfy public procurement law. To rescind is to set aside or unmake a contract.

(2) Misrepresentation

Misrepresentation means a false statement of fact made by one party to another party and has the effect of inducing that party into the contract.. A finding of misrepresentation allows for a remedy of rescission and sometimes damages depending on the type of misrepresentation. There are two types of misrepresentation in contract law, fraud in the factum and fraud in inducement. Fraud in the factum focuses on whether the party in question knew they were creating a contract. If the party did not know that they were entering into a contract, there is no meeting of the minds, and the contract is void. Fraud in inducement focuses on misrepresentation attempting to get the party to enter into the contract. Misrepresentation of a material fact makes a contract voidable.

(3) Procedure

In the United States, the breach of contract or to obtain specific performance or other equitable relief, the aggrieved injured party may file a civil (non-criminal) lawsuit in state court (unless there is diversity of citizenship giving rise to federal jurisdiction). Many contracts provide that all disputes arising there under will be resolved by arbitration, rather than litigated in courts.. On the other hand, certain claims have been held to be non-arbitral if they implicate a public interest that goes beyond the narrow interests of the parties to the agreement.

23. Martin, E [ed] & Law, J [ed], Oxford Dictionary of Law, ed6 (2006, London:OUP).

By using contract theory the family and social matters will be legally bind with contract

Contract theory is the body of legal theory that addresses normative and conceptual questions in contract law. It helps to legally bind the family and social matters with contract. One of the most important questions asked in contract theory is why contracts are enforced. One prominent answer to this question focuses on the economic benefits of enforcing bargains. Another approach, associated with Charles Fried, maintains that the purpose of contract law is to enforce promises. This theory is developed in Fried’s book, Contract as Promise. Other approaches to contract theory are found in the writings of legal realists and critical legal studies theorists. Another dimension of the theoretical debate in contract is its place within, and relationship to a wider law of obligations. Obligations have traditionally been divided into contracts, which are voluntarily undertaken and owed to a specific person or persons, and obligations in tort which are based on the wrongful infliction of harm to certain protected interests, primarily imposed by the law, and typically owed to a wider class of persons. Recently it has been accepted that there is a third category, restitutionary obligations, based on the unjust enrichment of the defendant at the plaintiff’s expense. Contractual liability, reflecting the constitutive function of contract, is generally for failing to make things better (by not rendering the expected performance), liability in tort is generally for action (as opposed to omission) making things worse, and liability in restitution is for unjustly taking or retaining the benefit of the plaintiff’s money or work. <href=”#cite_note-21″>[24] The common law describes the circumstances under which the law will recognize the existence of rights, privilege or power arising out of a promise.

24. Beatson, Anson’s Law of Contract (1998) 27th ed. OUP, p.21

What is specific Relief Act 1963 and how it is helped for binding contract of family and social matters:

The Specific Relief Act 1963 takes care of a large number of remedial aspects of law. It came in the replacement of the earlier Act of 1877. Protection of life and property cannot be assured by a simple declaration of rights and duties. The enumeration of rights and duties must be supplemented by legal devices, which help the individual to enforce his rights. Social redress must be provided to every person who is injured in the social process. <href=”#cite_note-21″>[25] Basically, the mission of the Specific Act is to assure that whenever there is a wrong there must be a remedy. The law of contract provides the remedy of damages for breach of contract. Similarly, the law of tort provides for recovery in cases of tortuous wrongs. However, substantive laws can never afford to be exhaustive in terms of their remedies and relief.

Recovery of Possession of Property by relief act

Though the Specific Relief Act is concerned only with the enforcement of civil rights and not penal laws, even civil law has to take care of certain rights, the violation of which is capable of creating serious violent clashes, and these are rights to possession of property. The very first chapter provides relief to those who have been dispossessed of their property. <href=”#cite_note-21″>[26]

Specific Performance of Contracts by relief act

The base of almost all economic relations is made of contracts. Every profession is contract bound. Property, whether owned by businesses or individuals are locked up under contracts. For example, money in banks and other forms of investment are contractually bound. As a result, contracts constitute modern wealth. They are sacred per se. Moreover, a particular contract is not an isolated transaction. Often it is a link in the chain of several contracts. A failure at one place could cause serious dislocation to economic and social life. Contracts thus must be enforced. However, awarding compensation to an injured person is the only way that the law of contract can enforce a contract. However, in many cases compensation fails to serve the economic purpose of a contract.

25. Ashok Kumar Srivastav v. National Insurance Co. Ltd., (1998) 4 SCC 361 : 1998 SCC (L&S) 1137: (1998) 2 LLN 987:(1998) 2 LLJ 699.

26. East India Hotels Ltd v. Syndicate Bank, 1992 Supp (2) SCC 29, 36,

Rectification and Cancellation of Instruments and Rescission of Contracts for family and social matters:

By law, many transactions are required to be in writing. Because of expediency, many more transactions are put into writing. A written transaction is called an instrument. An instrument is a result of negotiations. Sometimes, an instrument may fail to express the intention of the involved parties. Rectification of such an instrument may become necessary. Help towards parties who want to have their documents (which are mistakenly executed) rectified, is provided in Chapter III of the Specific Relief Act. Closely related with documents mistakenly executed, is the category of documents which are at a later point found to be void or which become void. These documents ought to be cancelled

How could be helped by preventive Relief:

There can be cases where the nature of the contract does not allow damages to likely serve any purpose nor admit to specific performance. In such cases, the court may have to restrain the party who threatens the breach, to the possible extent. For example, a person undertakes a contract to sing at a particular place and undertakes not to sing anywhere else during the same period. In case the singer threatens breach, the court cannot force him to sing. The positive side of the bargain is not specifically enforceable. But the negative undertaking i.e. not to sing elsewhere, can be enforced by restraining him from singing elsewhere. When he is prevented from resorting to other openings, it may exert some pressure upon his mind and he may be persuaded to go ahead with the performance of his contract. This type of remedy is known as preventive relief. It helps to prevent the rivalry of family and social matters for binding contract.

How could be helped by declaratory Relief:

This is the final matter, which is taken care of by the Specific Relief Act. Sometimes it may happen, that a person who is entitled to some status or character or has a right in some property but is being denied the enjoyment of his right by other parties. It was contended that the film hurt the plaintiff’s feelings as goddesses Saraswati, Lakshmi and Parvati were shown as being jealous and were ridiculed. It was held that the plaintiff’s failed to prove that the exhibition of the said film was generally a nuisance. If only the religious sentiments of the plaintiffs were hurt that did not amount to nuisance. It also related with family or social matters for binding contract.


In contract law, a legally binding contract must meet the formation requirements of a contract. Therefore, one party and an acceptance by the other party to the contract form a contract when there is an offer. However, consideration is essentially a bargained for exchange between two parties. When consideration is present, both parties to the contract make promises to Contract law allows either party to a valid contract to utilize the courts to enforce the contract. For instance, if one individual paints a house in reliance on another individual’s promise to pay for the work, then the court may enforce the other individual to pay for the work based upon the agreement. Whether, in contract law, courts may utilize the doctrine of promissory estoppels to enforce a contract that may lack sufficient consideration. Courts have discretion to use this doctrine when one party to a contract has detrimentally relied on the other party’s promise to do something. Most exchanges and interactions in the marketplace rely on the theory of contract law. Because contract law provides remedies when one party fails to complete his promise to the other party, the legally binding agreements that occur in the marketplace create enforceable obligations on both parties. Therefore, it places an importance on enforceable agreements between individuals that would otherwise be insignificant. One important factor to a contract is the existence of the legal capacity of both parties to be able to enter into a contract. In most cases, minors and mentally incapacitated individuals may not be legally able to make a choice to enter into a valid contract. Therefore, even if the elements of a contract exist, legal incapacity of one party can invalidate the enforceability of the contract. This is an important aspect to contract law, because the law protects certain individuals from being manipulated into entering into contracts when these individuals fail to understand the effects of the agreement. In the family and social matters it will help us to maintain the binding of contract which are very important for not only a country but also the whole world.


Books and Articles:

· Ashok Kumar Srivastav v. National Insurance Co. Ltd., (1998) 4 SCC 361 : 1998 SCC (L&S) 1137: (1998) 2 LLN 987:(1998) 2 LLJ 699.

· East India Hotels Ltd v. Syndicate Bank, 1992 Supp (2) SCC 29, 36, lease premises had to be vacated because of fire, earlier the lessor had terminated the lease on expiry of term, the lessee was seeking extension for another term, whether the lessee was entitled to be put back into possession, directed to be referred to larger Bench. Ramachandran Nair v. Sukumaran, AIR 2002 Ker 394, possession not proved. Puthukkattil Parangodan v. Puthukkattil Parameswaran, AIR 2002 Ker 221, the subject-matter of the tenancy was completely destroyed and the lease automatically terminated. But even so the landlord could claim and recover possession only through the court process. Ramchandra Sakharam Mahajan v. Damodar Trimbak Tanksale, (2007) 6 SCC 737: AIR 2007 SC 2577, the court explained the basic requirements of the suit.

· Ewan McKendrick, Contract Law – Text, Cases and Materials (2005) Oxford University Press ISBN 0-19-927480-0

· P.S. Atiyah, The Rise and Fall of Freedom of Contract (1979) Clarendon Press ISBN 0-19-825342-7

· Randy E. Barnett, Contracts (2003) Aspen Publishers ISBN 0-7355-6525-2

· Scott Fruehwald, “Reciprocal Altruism as the Basis for Contract,” 47 University of Louisville Law Review 489 (2009).

· Adhunik Steels Ltd v Orissa Mangenese Minerals (P) Ltd, (2007) 7 SCC 125: AIR 2007 SC 2563, the Supreme Court explained the various types of relief under the Act and their nature and scope.