A contract is formed when one party makes an offer, and the other party accepts the same. A contract is considered to be complete only when the acceptance of such offer is expressly or impliedly communicated to the offeror.
An agreement does not result from a mere state of mind, intent to accept an offer or even a mental resolve to accept an offer does not give rise to a contract. There must be some external manifestation of that intent by speech, writing or other act. Such manifestation may be in the form of express words, written or spoken or may be signified through conduct.
Proposal/ Offer and Acceptance: Definitions
The offer or proposal is the starting point in the formation of a contract. The parties, through negotiation & bargaining may strike a deal resulting into acceptance of the offer, thereby creating a contract. However, in modern times, due to an enormous increase in commercial transactions, ‘standard form’ of contracts is used.
When one person signifies to another his willingness to do or abstain from doing with a view to obtaining assent of that another to such act or abstinence, is said to propose.
Essentials of a valid contract
Offer + Acceptance = Promise + Consideration = Agreement + Enforceability by law contract
- Lawful offer and acceptance
For a valid contract it is must that there should be a ‘lawful offer’ and a ‘lawful acceptance’ of the offer, which results into an agreement. Here, the term ‘lawful’ refers to legal essentials that must be fulfilled as provided under the Indian Contract Act.
- Intention to create legal relation
Another important essential is that there must be intention of the parties to agree. Such an agreement should be attached by legal consequences and create legal obligations. This is important to note that agreements of social or domestic nature do not contemplate legal relations; hence it does not give rise to a contract.
Breach of Property Contracts in UAE
Remedy by way of damages is the most common remedy which is available to the injured party. This entitles the injured party to recover compensation for the loss suffered by him due to the breach of contract, from the party that causes the breach.
Compensation for Loss or Damage Caused by Breach of Contract
When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in usual course of things from such breach, or which the parties knew, when they made the contract to be likely to result from the breach of it.
Remedies for breach of contract
Suit for an Injunction
‘Injunction’ is an order of a Court restraining a person from doing a particular act. It is a mode of securing the specific performance of the negative terms of the contract. Where a party is in breach of a negative term of the contract, the Court may, by issuing an injunction, restrain him from doing what he promised not do so. It is particularly appropriate in case of anticipatory breach of contract where damages would not be an adequate relief.
Suit for Quantum Meruit
When the injured party has performed a part of his obligation under the contract before the breach of contract has occurred, he is entitled to the value of what he has done.
Essentials of Quantum Meruit
- One of the parties makes a breach of contract or prevents the performance of it by the other side;
- The party injured by the breach of the contract, who has already performed a part of it, elects to be discharged from further performance of the contract and brings an action for recompense for the value of the work he has already done.
Suit for Specific Performance of the Contract
There are cases where the damage or loss suffered cannot be measured in terms of money. The Court may in such cases where the ordinary remedy by a claim for damages is not adequate compensation, direct the defaulting party to perform the contract specifically. Specific performance is an order of the Court directing the defendant to fulfill his obligations under the contract. Specific performance is a discretionary remedy and is only available where damages are not an adequate remedy.
Damages
Damages under the Contract Act are not granted by way of punishment. They are compensatory in nature. The object is to compensate the injured party and bring him on the same position in which he would have been, if there was no breach of contract.
Breach of property contracts in UAE can lead to significant losses for either party. To protect yourself against this you may hire a property attorney and can seek assistance for filing a claim for breach of contract.
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