It is a settled principle in English law that “to create a contract there must be a common intension of the two parties to enter into legal obligation”.

It is a settled principle in English law that “to create a contract there must be a common intension of the two parties to enter into legal obligation”.

Introduction:

We are social being. We live in society. To live in society and continue our daily life , we nee a multiple of things. But can we get everything, what we need? Some one can get some one not? Though those required goods or things are available in market. For example , we need food or vegetables. But can we get them according to our will? Can we get them without giving anything in return? We all know, we can not. But why, we can not? Because there are some rules and regulations regarding those goods, that we have to abide by. So we need the rules and regulations to maintain our social life. Those rules and regulations are actually the rules settled by our government. And those are known as rules. Now what the rule is? Those rules are known as law. Now let’s see what the law is all about.

Law is such a thing which is necessary for the well being of society. It is needed for the peace of our country as well as our society. Law guides us to keep the society in peace. On the other hand we can say that law is the guideline of our life. Though there is also God made law. But we are going to maintain or practice that law, which is imposed by the sovereign government. It is such things that actually guide us to behave in a way so that others are not disturbed by our attitude.

Here we are going to discuss about it is settled in English law that, to create a contract there must be a common intension between two parties to enter into legal obligation. It is known to all that to create a contract in any purpose there are two parties. One is called offeror and another is called offeree. Now the problem is that contract can not be performed unless there is offer and acceptance, though there are some exceptions.

Acceptance and offer is not enough to form a contract. The contract will be legally enforceable by law if the subject of the contract itself is legal. So to make an enforceable contract the object must be legal. In the given statement, I found three main topic. Those are create contract, common intension and legal obligation. Those three objective statements are discussed one after another.

Create Contract:

Create contract means to come to a agreement to form a contract. But to create a contract there must be the agreement of both the parties. If one party agrees to form a contract but other is not. Then there can not be created a contract. Both the party must come to make agreement. The agreement can be both orally and written. In case of oral contract there is a possibility that in future the any party of that contract may ignore that there was a contract made. It is possible in our country. But in case of other country other than one it is possible. That means in our country the written contract is most popular or can be said used. Oral contract used merely in case of close trust.

Common Intension:

Two party agrees to make a contract and they are forming a contract. But if any one of the party do not have the common intension to do the same or what they are destined to do, then there can be a contract. So if one party gives some thing the another party must also give some thing in tern. That means the agreement can not be one sided contract. They must have the common intension to have same or both sacrifice in the agreement.

Legal obligation:

Lets assume that two party agree to make a contract and there is also common intension is there but the object of the contract or the subject of the contract itself is illegal, then is if can be a valid contract? In the eye of law or common sense it is not. It can be a contract, but not a valid one. Valid means it can not be enforceable by law. There may be a contract that if you bring me the old statue of a museum through steal I will give you 50,000 taka. As a result the party take the statue from the museum through steal but the another party refused to pay the money. But now the party who was used to give the money can not enforce the another party because the object of the contract itself is illegal. So it can not be enforceable by law. The subject of the contract must be legal or valid.

But relevant things like law, English law and contract law need to be discussed. Let’s see what the various authors have said about the law, English law and contract law. The definitions of law taken from various source given below:

Law:

Law is a system of rules and guidelines, usually enforced through a set of institutions. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. [1]

A binding custom or practice of a community : a rule of conduct or action prescribed or formally recognized as binding or enforced by a controlling authority. [2]

A rule of conduct or procedure established by custom, agreement, or authority. The body of rules and principles governing the affairs of a community and enforced by a political authority. [3]

The system of rules that a particular country or community recognizes as regulating the actions of its members and may enforce by the imposition of penalties. [4]

The principles and regulations established in a community by some authority and applicable to its people, whether in the form of legislation or of custom and policies recognized and enforced by judicial decision. [5]

Any written or positive rule or collection of rules prescribed under the authority of the state or nation, as by the people in its constitution. Compare bylaw, statute law. [6]

The controlling influence of such rules; the condition of society brought about by their observance: maintaining law and order. [7]

The collection of rules imposed by authority; “civilization presupposes respect for the law”; “the great problem for jurisprudence to allow freedom while enforcing order” [8]

So from the above discussion we can say that law is all about the bindings imposed by the government. These rules of laws are actually written for the first time by England. There are many country including us is actually following the laws. The bindings actually shape the various activities of the country those are included political, economical and also of business purpose. So in a single word law make us follow certain criteria that guide us to maintain the general peace of the society as well as country. Lets see what is English law. What is right in the eye of common sense is law. Those are then actually established by England. And we are just following it. And some of are clarified according to our society and the surrounding environment. Let see what is English law.

English law

It is the legal system of England and Wales, and is the basis of common law. English law prior to the American Revolution is still part of the law of the United States through reception statutes, and provides the basis for many American legal traditions and policies, though it has no superseding jurisdiction. [9]

The essence of English common law is that it is made by judges sitting in courts, applying their common sense and knowledge of legal precedent to the facts before them. A decision of the highest appeal court in England and Wales, the Supreme Court of the United Kingdom, is binding on every other court in the hierarchy, and they will follow its directions. For example, there is no statute making murder illegal. It is a common law crime – so although there is no written Act of Parliament making murder illegal, it is illegal by virtue of the constitutional authority of the courts and their previous decisions. Common law can be amended or repealed by Parliament; murder, by way of example, carries a mandatory life sentence today, but had previously allowed the death penalty. [10]

Contract Law

A contract is an agreement giving rise to obligations which are enforced or recognized by law. [11]

English contract law is a body of law regulating contracts in England. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth (such as Australia, Canada and India, and the United States.

Any agreement that is enforceable in court is a contract. Because a contract is a voluntary obligation, in contrast to paying compensation for a tort and restitution to Reverse unjust enrichment, English law places a high value on ensuring people have truly consented to the deals that bind them in court.

Generally a contract forms when one person makes an offer, and another person accepts it by communicating their opposite person or party or performing the offer’s terms. If the terms are certain, and the parties can be presumed from their behavior to have intended that the terms are binding, generally the agreement is enforceable.

Some contracts, particularly for large transactions such as a sale of land, also require the formalities of signatures and witnesses and English law goes further than other European countries by requiring all parties bring something of value, known as “consideration“, to a bargain as a precondition to enforce it. Contracts can be made personally or through an agent acting on behalf of a principal, if the agent acts within what a reasonable person would think they have the authority to do.

Contract law works best when an agreement is performed, and recourse to the courts is never needed because each party knows her rights and duties. However, where an unforeseen event renders an agreement very hard, or even impossible to perform, the courts typically will interpret the parties to want to have released themselves from their obligations. It may also be that one party simply breaches a contract’s terms. If a contract is not substantially performed, then the innocent party is entitled to cease her own performance and sue for damages to put her in the position as if the contract were

performed. She is under a duty to mitigate her losses and cannot claim for harm that was a remote consequence of the contractual breach, but remedies in English law are footed on the principle that full compensation for all losses, pecuniary or not, should be made good. In exceptional circumstances, the law goes further to require a wrongdoer to make restitution for their gains from breaching a contract, and may demand specific performance of the agreement rather than monetary compensation. It is also possible that a contract becomes void able, because, depending on the specific type of contract, one party failed to make adequate disclosure or they made misrepresentations during negotiations. Unconscionable agreements can be escaped where a person was under duress or undue influence or their vulnerability was being exploited when they apparently agreed to a deal. Children, mentally incapacitated people and companies, whose representatives are acting wholly outside their authority, are protected against having agreements enforced against them where they lacked the real capacity to make a decision to enter an agreement. Some transactions are considered illegal, and are not enforced by courts because of a statute or on grounds of public policy. In theory, English law attempts to adhere to a principle that people should only be bound when they have given their informed and true consent to a contract. [12]

Contract law concerns enforceable promises, and can be summed up in the Latin phrase pacta sunt servanda (agreements must be kept) In common law jurisdictions, three key elements to the creation of a contract are necessary: offer and acceptance, consideration and the intention to create legal relations. [13]

So, lets explain these terms so that the given statement can be illustrated.

A contract is an agreement giving rise to obligations which are enforced or Recognized by law. In common law, there are 3 basic essentials to the creation of a contract: (i) agreement; (ii) contractual intention; and (iii) consideration.

.The first requisite of a contract is that the parties should have reached agreement. Generally speaking, an agreement is reached when one party makes an offer, which is accepted by another party. In deciding whether the parties have reached agreement, the courts will apply an objective test.

A. Offer:

An offer is an expression of willingness to contract on specified terms, made with the intention that it is to be binding once accepted by the person to whom it is addressed. There must be an objective manifestation of intent by the offeror to be bound by the offer if accepted by the other party. Therefore, the offeror will be bound if his words or conduct are such as to induce a reasonable third party observer to believe that he intends to be bound, even if in fact he has no such intention. This was held to be the case where a

University made an offer of a place to an intending student as a result of a clerical error. An offer can be addressed to a single person, to a specified group of persons, or to the world at large. An example of the latter would be a reward poster for the return of a lost pet.

An offer may be made expressly (by words) or by conduct.

An offer must be distinguished from an invitation to treat, by which a person does not make an offer but invites another party to do so. Whether a statement is an offer or an invitation to treat depends primarily on the intention with which it is made. An invitation to treat is not made with the intention that it is to be binding as soon as the person to whom it is addressed communicates his assent to its terms.

B. Acceptance :

An acceptance is a final and unqualified expression of assent to the terms of an offer. Again, there must be an objective manifestation, by the recipient of the offer, of an intention to be bound by its terms. An offer must be accepted in accordance with its precise terms if it is to form an agreement. It must exactly match the offer and ALL terms must be accepted. An offer may be accepted by conduct (for example, an offer to buy goods can be accepted by sending them to the offeror).

Acceptance has no legal effect until it is communicated to the offeror (because it could cause hardship to the offeror to be bound without knowing that his offer had been accepted). The general rule is that a postal acceptance takes effect when the letter of acceptance is posted (even if the letter may be lost, delayed or destroyed).

A communication fails to take effect as an acceptance where it attempts to Vary the terms of an offer. In such cases it is a counter-offer, which the original offeror can either accept or reject. For example, where the offeror offers to trade on its standard terms and the offeree purports to accept, but on its own standard terms, that represents a counter-offer. Making a counteroffer amounts to a rejection of the original offer which cannot subsequently be restored or accepted (unless the parties agree).It is important to distinguish a counter-offer from a mere request for further information regarding the original offer.

An offer may be revoked at any time before its acceptance; however the revocation must be communicated to the offeree. Although revocation need not be communicated by the offeror personally (it can be made by a reliable third party), if it is not communicated, the revocation is ineffective.

Once an offer has been accepted, the parties have an agreement. That is the basis for a contract, but is not sufficient in itself to create legal obligations.

C. Consideration:

In common law, a promise is not, as a general rule, binding as a contract unless it is supported by consideration (or it is made as a deed). Consideration is “something of value” which is given for a promise and is required in order to make the promise enforceable as a contract. This is traditionally either some detriment to the promisee (in that he may give value) and/or some benefit to the promisor (in that he may receive value). For example, payment by a buyer is consideration for the seller’s promise to deliver goods, and delivery of goods is consideration for the buyer’s promise to pay. It follows that an informal gratuitous promise does not amount to a contract. Consideration must be sufficient, but need not be adequate.

Although a promise has no contractual force unless some value has been given for it, consideration need not be adequate. Courts do not, in general ask whether adequate value has been given (in the sense of there being any economic equivalence between the value of the consideration given and the value of any goods or services received). This is because they do not normally interfere with the bargain made between the parties. Accordingly, nominal consideration is sufficient. Consideration must not be from the past. The consideration for a promise must be given in return for the promise. The consideration must move from the promise.

The promisee must provide the consideration. Traditionally, a person to whom a promise was made can enforce it only if he himself provided the consideration for it. He has no such right if the consideration moved from a third party. For example, if Rashed promises Bijoy to pay tk. 10,000 if Hasan will paint Rashed’s house and Hasan do that d, Bijoy  cannot enforce Rashed’s promise (unless Bijoy had procured or undertaken to procure Hasan to do the work). However, where the conditions of the Contracts (Rights of Third Parties) Act 1999 are met, a third party may be able to enforce rights created in his favor by a contract which he was not a party to, and the courts are also adopting a more flexible

Consideration may move from the promisee without moving to the promisor where the promisee, at the promisor’s request, confers a benefit on a third party. In situations where goods are bought with a credit card, the issuer makes a promise to the supplier that s/he will be paid. The supplier provides consideration for this by providing goods to the customer.

Something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances. Consideration is an essential element for the formation of a contract. It may consist of a promise to perform a desired act or a promise to refrain from doing an act that one is legally entitled to do. In a bilateral contract—an agreement by which both parties exchange mutual promises—each promise is regarded as sufficient consideration for the other. In a unilateral contract, an agreement by which one party makes a promise in exchange for the other’s performance, the performance is consideration for the promise, while the promise is consideration for the performance. [14]

The mere fact of agreement alone does not make a contract. Both parties to the contract must provide consideration if they wish to sue on the contract. This means that each side must promise to give or do something for the other. (Note: if a contract is made by deed, then consideration is not needed.)

For example, if one party, A (the promisor) promises to mow the lawn of another, B (the promisee), A’s promise will only be enforceable by B as a contract if B has provided consideration. The consideration from B might normally take the form of a payment of money but could consist of some other service to which A might agree. Thus the promisee has to give something in return for the promise of the promisor in order to convert a bare promise made in his favor into a binding contract.

Definition of contract consideration

Lush J. in Currie v Misa (1875) LR 10 Exch 153 referred to consideration as consisting of a detriment to the promisee or a benefit to the promisor:

“… some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.” [15]

The definition given by Sir Frederick Pollock, approved by Lord Dunedin in Dunlop v Selfridge Ltd [1915] AC 847, is as follows:

“An act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable.” [16]

D. Contractual intension :

An agreement, even if supported by consideration, is not binding as a contract if it was made without an intention to create legal intentions. That is,the parties must intend their agreement to be legally binding. In the case of ordinary commercial transactions, there is a presumption that the parties intended to create legal relations. The onus of rebutting this presumption is on the party who asserts that no legal effect was intended, and the onus is a heavy one.Many social arrangements do not amount to contracts because they are not intended to be legally binding. Equally, many domestic arrangements, such as between husband and wife, or between parent and child, lack force because the parties did not intend them to have legal consequences. a husband who worked abroad promised to pay an allowance of 20,000 tk  per month to his wife, who was in UAE. The wife’s attempt to enforce this promise failed: the parties did not intend the arrangement to be legally binding. (In addition, the wife had not provided any consideration.  An agreement which is made “subject to contract” or a “letter of comfort” is generally unenforceable. The words normally negate any contractual intention, so that the parties are not bound until formal contracts are exchanged.

Conclusion:

So from the above discussion we can say that law is the only procedure that can help us to continue our daily life in a smooth and good way. Without the law system the total social system may not work properly. The law is a very well system to run the society as well as the country in a legitimate way. It is necessary for our own benefit and to maintain the system of our society. It also helps to lead our life through legal way. By reducing various crime activities it help to maintain the sociological system of country.

To create a contract there must two parties and there also must be an offer or and an offered. Without their involvement there can not be a contract. Their involvement means the legal consideration. Consideration is such a thing that means there must be given by the offerror and in return the offerree also must give some thing. And there must be a consideration of legal thing. That means the means of business must be of legal thing. The thing means the business must be of legal affairs. It is not be of a illegal thing. If it is of illegal thing then it is must be judged by the law authority. At last it can be said that without legal consideration of both the parties no contract can be formed.

At last, we can say that, law system is the common sense of human being. That means our common sense guide us what is right and what is wrong. The evaluation of the right and wrong deeds is the law system. If we use our common sense to form a contract or any business then law system will be maintained.

BIBLIOGRAPHY

  1. www.en.wikipedia.org
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  1. www.oxforddictionaries.com
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  1. www.lawcoursework.com
  1. www.lawyernjurists.com
  1. www.legal-dictionary.thefreedictionary.com
  1. www.lawteacher.net

[1] See 1st two line of http://en.wikipedia.org/wiki/Law

[2] Revised the first para of

http://www.merriam-webster.com/dictionary/law?show=0&t=1306155424

[3] See two lines of 1st para http://www.thefreedictionary.com/laws

[4] See 1st para of http://www.oxforddictionaries.com/definition/law?view=uk

[5] See 1st para of http://dictionary.reference.com/browse/law

[6] See  2nd para of http://dictionary.reference.com/browse/lawing

[7] See 3rd para of  http://dictionary.reference.com/browse/lawing

[8] See  3rd line of http://www.thefreedictionary.com/demurrer

[9] Revised from the following page  http://en.wikipedia.org/wiki/English_law

[10]: Revised from the following page  http://en.wikipedia.org/wiki/English_law

[11] See the 2nd line of 4 th para www.lawcoursework.com/cat/contract_law_essays.php?sort=eq

[12] See 1st para of http://en.wikipedia.org/wiki/English_contract_law

[13] See 1st two line of 1st  para of contract law http://en.wikipedia.org/wiki/Law

[14] See 1st two Para of http://legal-dictionary.thefreedictionary.com/Consideration+%28law%29

[15] 1.See the page  http://www.lawteacher.net/contract-law/lecture-notes/consideration-lecture.php

[16] 1.See the page http://www.lawteacher.net/contract-law/lecture-notes/consideration-lecture.php