Examination Timing: 00H00M28S
John agrees to sell his car to Peter for £5,000. They shake hands and Peter gives John a cheque for the amount. However, John then changes his mind and decides to keep the car. Peter wants to enforce the agreement.
What is the essential element required to establish a binding contract in this scenario?
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The essential elements required to establish a binding contract include offer and acceptance, consideration, intention to create legal relations, and capacity. In this scenario, there was an offer (John selling the car), acceptance (Peter agreeing to buy the car), and consideration (the £5,000 cheque). Therefore, a binding contract was formed.
Key Point: The formation of a contract requires clear elements, including offer and acceptance, to ensure both parties are legally bound by the agreement.
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