1.1 Basic Elements of Contract
In order to form a valid contract, each agreement must fulfill some important elements which are stated in Section 10 (1) of Contract Act 1950,
“All agreements are contract if they are made by the free consent of parties competent to contract, for a lawful object, and are not hereby expressly declared to be void.”
This section emphasizes the legal contract, the willingness and the parties capable of contracting and consideration which are all part of the basic elements of a contract. The following are the basics elements of the contract, a) Offer b) Acceptance c) Consideration d) Ability to Contract e) Intention to Create Legal Relations f) Certainty g) Free …show more content…
Another way of stating this is to say that there can be no acceptance of the offer without knowledge of the offer by virtue of the Section 4(1) of Contracts Act 1950.
Section 4(1) Contracts Act 1950 states that,
“Communication of a proposal is complete when it is comes to the knowledge of the person to whom it is made”
By referring the case R v Clarke ,the claimant wanted to compel the Crown to pay a reward it had offered for information leading to the conviction of a murderer. The claimant gave the information. But he gave it while he was under investigation himself for murder. He told the police exclusively in order to clear himself. It was uncertain whether he was thinking about the reward at the time he coughed up the information.
In the judgment, Higgins J interpreted the evidence to say that Clarke had forgotten about the offer of the reward. Starke J and Isaacs ACJ only went so far as to say that he had not intended to accept the offer. The Court held it was necessary to act in "reliance on" an offer in order to accept it, and therefore create a contract. Starke J said "the performance of some of the conditions required by the offer also establishes prima facie an acceptance of the offer." But here it was held that the evidence showed, Mr. Clarke was not acting on the offer. So a presumption that conduct which appeared to be an acceptance was relying on an offer was displaced.