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5 The nature of a contrac

  1 Nature of a contract

  Overview

  Definition

  1.1 An agreement supported by consideration from both parties and made with intention to be legally binding.

  1.2 It must be made by those with legal capacity and the purpose of the contract must not be illegal.

  1.3 More simply it could be regarded as an agreement recognised in law.

  Forms of contracts

  1.4 Simple contracts do not require any specific formalities i.e. they can be verbal.

  1.5 Standard form contracts are where terms have not been individually negotiated.

  Effect of failure

  1.6 Void contract means there is no contract.

  1.7 Voidable contract means the contract can be avoided by one party.

  1.8 Unenforceable contract means the contract is valid but performance by one party cannot be enforced.

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