What are the main elements of the law of contract?

When a customer buys goods or service from a trader, such as a shop or a building contractor, they are entering into a contract. Under the Sale of Goods Act 1979, amended by the Sale and Supply of Goods Act 1994, and the Supply of Goods and Services Act 1982, the consumer then has automatic statutory rights.

A contract is a legally binding agreement concerning the exchange of something of value between two or more parties. A contract does not have to be in writing; verbal agreements are just as legally binding as written ones, but they are harder to prove.

The contract must contain the following three elements if it is to be legally binding:

1.      The offer (a customer offers to buy goods or services)

2.      Acceptance (a trader agrees to sell for a certain price)

3.      Consideration (the exchange of payment for goods)

In addition to these elements, extra terms can be written into a contract, such as a particular delivery date. Any rights that the contract gives the customer are in addition to their statutory rights.

Additional legislation relating to contracts is covered by the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1994 (SI 1994 no.3159). These laws are designed to stop traders from putting unfair terms in contracts with customers and clients.