Consumer protection

ENTERING INTO A CONTRACT

In simple terms a contract is a promise or set of promises which the law will enforce. Over many years, courts have developed principles which tell us whether there is a legally binding or enforceable contract in existence.

In a contract for the sale of goods or services there is a legal agreement between you and the person from whom you are purchasing goods or services whereby they agree to sell you those goods or services and you agree to pay for them at an agreed price or an agreed rate.

How do you know you have entered into a contract?

An agreement for sale of goods or services arises where the following elements are present:

An offer and an acceptance of that offer

A few examples of how this happens in practice:

When you are purchasing goods in a shop the offer is made not by the shopkeeper displaying the goods but when you take the goods to the checkout and offer to buy them.
Generally, circulars and catalogues do not constitute offers but rather you sending in an order form is the offer.
At auctions, a bidder makes the offer and the offer is accepted by the auctioneer with the fall of the hammer.

Consideration

This element of a contract does not mean that you have to have given consideration to whether to make the offer or to accept an offer! Consideration is a term which simply means that each of the parties has to give something for what they receive under a contract.

For example, you get the goods and the seller gets your money.

It is not always necessary that money must actually change hands before a contract comes into existence: often the consideration is just a promise to pay and that is sufficient.

Accordingly you cannot rely on the fact that you have not actually paid for the goods as a basis for saying that there was no contract.

An intention to be legally bound

Generally where there are agreements which relate to family, social or domestic relationships courts will presume that there is no intention to create a legally binding agreement.

In commercial situations however, courts will presume that this intention existed.

Read on about Consumer Protection.

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