Mandatory Legal Disclaimer: This is not legal advice and should not be taken as legal advice. While legally educated, the author of this article is not a qualified solicitor or barrister. This article should be taken as nothing more than the musings of an article, and nothing here should be relied upon in your personal legal matters. If you ever run into a situation where you consider taking legal action, then you should seek out a lawyer and get their advice.
How to create a contract?
So, as we all know, a key matter of any freelancer or business is agreements to sell either products or services in any capacity. When selling such matters you are engaged in a legally binding contract. This article will take a deep dive into all the laws you could ever want to know about forming a contract. This article will start by reviewing the basics of contractual rules, before secondly discussing terms and conditions that are often included and the advantages of said terms. After this article has covered the above points its final section will be spent going over a basic blueprint of what a contract should look like.
Yes, a basic element of contracts was dealt with in the article on legal rights, but this article shall take a much deeper look at the elements of contract law, giving you a thorough and deep understanding of the rules you must follow.
Basic Contractual Rules
So, let’s start with the basics, we will explore the very base rules of establishing a contract. Why are we taking this approach? That’s because ultimately a contract is made to be custom to your needs, you can decide what a contract should do and what it shall include. This article is not designed to give you a reusable contract which you only need to copy and paste, instead this article is designed to allow you to design your own contract to your own needs.
Why take this approach? This is a fair question, the reason is simply that as stated; this will allow you maximum control and customizability. Plus, even better, contracts are easy to write. Don’t believe me? Well ask yourself this, if A and B were at a restaurant and A wrote on a napkin that they will give B £500 if B buys A a pudding would A be obliged to pay B the money? Yes, contracts do not have formal requirements, they can be as informal as you want. Hence why it’s perfect for you to write your own.
You will see alongside these notes names of cases in brackets, this is where the authority for the statements comes from.
As a starting point, one must know that a contract has three definitive requirements, of which all three must be satisfied to create a binding contract; these requirements are offer and acceptance, consideration and intention to be legally bound. This article shall now explore each of these elements individually.
Offer and Acceptance
This element may appear basic at a first glance, however, as with all things in the law, this simplistic look is deceiving. The first question here is that there must have been an offer made by one party to another. In deciding if a matter is an offer one must first know the alternatively, known as an intention to treat. Providing an intention to treat is to provide another with the invitation to make an offer. It has been decided that items stored on display in shops are such invitation to treat (Pharmaceutical Society of Great Britain v Boots  1 QB 401), the same is true for advertisements (Partridge v Critenden  2 All ER 425), this does include matters such as self-service machines (Thornton v Shoe Lane Parking  2 WLR 585). In this sense, the key matter for consideration of whether a matter has been an offer is the intention behind the statement. (Harvey v Facey  UKPC 1) If you are for instance a freelancer advertising on Revolancer then it is clear that your advert would not be an offer (Partridge v Critenden), the offer is made when the entrepreneur contacts you to procure your services.
Now that you know whether and how the offer has been made you will learn how to accept that offer. An offer may be accepted at any time before it is rejected (Entores v Miles Far East  2 QB 327), such acceptance must be a positive act and cannot be an omission (Felthouse v Bindley  EWHC CP J35), although conduct can be taken as an acceptance (Butler Machine-Tool v Ex-cell-o Corporation  1 WLR 409). Such acceptance, however, must be decisive and clear (Sudbrook Trading Estate v Eggleton  AC 444). In this sense you can understand when the offer that has been made by you has actually been accepted, this is important as you can revoke any offer anytime before it is accepted (Dickinson v Dodds  2 Ch D 463).
Now we have covered both offer and acceptance we will look at what revocation looks like. There are 3 more criteria where an offer may be revoked outside of simply one party choosing to revoke the offer. The first of these is through making a counter offer, as soon as one is made any previous offers are rejected (Hyde v Wrench  49 ER 132). The second category where an offer may be rejected is through the death or severe injury of one of the parties or finally the passage of significant time; simply the law states that where an unreasonable amount of time has passed there will no longer be any offer (Motifieore v Victoria Ramsgate Hotel  LR 1 Ex 109).
So, now this entire section is completed, as a recap, you can make any offer at any time, although any advert, display or very often contacting an individual will instead constitute an invitation to treat, only for the client to make the offer by contacting you. At which point you must then ensure that you accept in a timely fashion or if you want to evade a contract that you revoke it before it has been successfully accepted.
The next element of a valid contract is consideration. This means what is traded within a contract. This includes what is effectively agreed to be paid. As a starting point, there is no legal restriction on the value of what is traded, you could trade candy wrappers if you really wanted and it’d still be a legally binding contract (Chappel v Nestle  AC 87). As such, the value of a traded matter is not important, the contract will be legally binding as long as there is value, it matters not what that value is.
The further restrictions to consideration are that: firstly consideration must not be past, meaning that you must not rely on something that was already given (Re McArdle  Ch 669); secondly, your legally binding contract must involve the consideration moving from you to the other party. It cannot be for another person to provide that service (unless such person is provided by you, such as an agent) (Twiddle v Atkinson  EWHC QB J57); thirdly the consideration must not be a matter which you are already legally obliged to give or a duty you are obliged to undertake (Stilk v Myrrick  EWHC KB J58).
The third and final requirement of a legally binding contract is that there is an intention to form legal relations. This means that both parties to a contract must have, in the agreement they formed, held intention to be legally bound by their agreement. Social agreements between friends (Jones v Padavatton  1 WLR 328) as well as most agreements between families are not considered legally binding (Balfour v Balfour  2 KB 571). This is, however, a presumption that may be revoked if evidence of legal intention is provided. Three matters may give this revocation of the presumption: firstly if the contract is written down (Errington v Errington Woods  1 KB 290), secondly if the contract specifically states that it is to be legally binding (Merritt v Merritt  1 WLR 1211), finally a contract may be found to evidently be binding if a third party is included within the contract, outside of the above relationships. (Simpkins v Pays  1 WLR 955).
So as we have seen, the above 3 elements are the only requirements for a valid legally binding contract. One key thing to remember is that if you do not want a contract to be legally binding then there are ways around that, namely, you can always include the term “binding in honour only” which has been taken to remove the legally binding element from a contract (Rose and Frank v Crompton Bros  AC 445).
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