What are the other essential elements of a contract?
The consensus in idem, both parties must agree on the material aspects of the contract. This is illustrated in the case Mathieson Gee (Ayrshire) Ltd v Quigley 1952 an offer was made to supply equipment to remove mould from a pond however the acceptance was on the basis that the company would remove the mould and not on the hire of equipment. The material aspect was not in agreement, therefore, it was held there was no contract.
Parties must have Capacity: – The definition of contractual capacity is “The law’s recognition that you are capable of assuming legally binding obligations” Capacity is considered under the following areas:
- Age – under The Age of Legal Capacity (Scotland) Act 1991 states that children below the age of 16 cannot enter into legally binding contracts although there are some exceptions. The law also provides extra protection for those ages 16-18. If in doubt transact with their guardian!
- Intoxication – either under the influence of alcohol, drugs or medication however the extent of intoxication will a determining factor in whether the person has capacity as seen in Taylor vs Provan (1864) This case involved a cattle dealer offering a business colleague £12 per head of cattle which was not agreed to, however, he returned later the same day in a state of intoxication and offered £15 which were agreeable to his colleague. When the dealer contested on the grounds of intoxication it was held that his intoxication was not to the extent where he had no capacity and the £15 stood. Obviously, the reasonableness of the transaction will be considered. Mental incapacity – generally a contract entered by someone who is mentally incapacitated will be void unless it was made during a lucid moment. A curator Bonis may contract on the behalf of someone with mental incapacity, as seen in Louden vs Elder Curator Bonis 1923 this case involved a meat merchant, Elder entering into a contract for the sale and purchase of meat in the same month he was declared insane. The curator Bonis intimated that he was insane at the time of the transaction and the court agreed.
- Corporate bodies – The doctrine of Ultra Vires states that corporate bodies cannot contact in matters out with those powers conferred on it during constitution.
- Unincorporated bodies –no capacity to contact, contracts must be made through office bearers.
- An intention to be legally bound: – perhaps the most important element of a contract and means the parties must have a clear intention to be legally bound. Although social arrangements can be a verbal contract of sorts, they are not legally enforceable as the intention to be legally bound does not exist. A case which illustrates this is Balfour v Balfour 1919 this involved a husband who was stationed abroad and his wife who remained in England. The wife sued the husband as he had not stood by his agreement to send £30 a month to her. It was held that this was a domestic arrangement and thus there was no intention to be legally bound.