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Contract Law
 

Formation of a contract

A contract is formed when: party A makes an offer; party B makes accepts that offer; both party A and party B have an intention to create legal relations; both party A and party B have the capacity to create legal relations (one is not, for example, a child); and consideration passes between them.

So, when I, being over 18 years old, want to buy a new TV, I find someone who is selling a model that suits my requirements. I then make an offer to that seller. If my offer is accepted, I hand over my consideration (money) in exchange for the TV.

 

Contracts have been formed by communication between computers since before the emergence of the Internet. Businesses have for some time being using electronic data interchange (EDI) to communicate standard format information. For instance, supermarkets re - ordering stock from their suppliers.

Increasingly contract law is adapting to contracts formed in relation to the Internet. Most commonly this is the exchange of e-mails or in connection with a Web page.

An offer is made when one party offers to sell or supply something on the basis that it will be legally bound by the acceptance of that offer. An offer must be distinguished from an invitation to treat which is only intended to provoke an offer from another party. The distinction hinges on the intention of the party selling the goods or services.