A contract is entering into a formal and legally binding agreement, an agreement of two or more persons or entities. In which there is a promise to do something in return for a valuable benefit known as consideration. Consideration is; something of value given by both persons to a contract that induces them to enter into an agreement to exchange mutual goods or services.
There are two types of contract, bilateral and unilateral. Unilateral contracts consist of only the promiser, meaning it requires that only one party make a promise that is open and available to anyone who performs the required action; e.g. advertisements. A bilateral contract is used during the purchasing or suppling of goods or services. There is two distinct parties involved in the bilateral contract and it requires both parties to perform an action. For the purpose of this essay only bilateral contracts will be addressed.
The Sale of Goods and Supply of Services Act, (1980) section (43.) states; In Part “contract” means a contract of sale of goods, a hire-purchase agreement, an agreement for the letting of goods to which section 38 applies or a contract for the supply of a service.
When a contract is terminated it
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On the 11th May the defendant wrote to the claimant stating he no longer wanted his services and refused to pay compensation. The claimant obtained a service contract elsewhere but this was not to start until 4th July. The claimant brought an action on 22nd May for breach of contract. The defendant argued that there was no breach of contract on 22nd May as the contract was not due to start until 1st of June. Where one party communicates their intention not to perform the contract, the innocent party need not wait until the breach has occurred before bringing their claim. They may sue immediately or they can choose to continue with the contract and wait for the breach to