THE CONCEPT OF BARGAIN

Topic of the day

- The meaning of bargain

- The importance of bargain

THE MEANING OF BARGAIN

The concept of "bargain" in legal terms generally refers to a mutual agreement or contract between two parties in which each party provides something of value to the other.

We can also say bargain is a legally binding agreement between two parties for the exchange of goods, services, promises, or considerations.

So, what are bargain elements? We have;

1. Proposal: this is when one party proposes the terms of an agreement.

2. Acceptance: This is when the other party agrees to the terms offered.

3. Consideration: This is when the parties must exchange something of value, such as money, services, or goods.

4. Intent to create legal relations: This is when the parties must intend that the agreement be legally binding.

Below are some of bargaining cases that we can see quickly:

1. Carlill v. Carbolic Smoke Ball Co. (1892): In this case, the company offered a reward to anyone who used its product and still contracted the flu. Mrs. Khalil fell ill after using it. The court held that the company's advertising constituted a unilateral offer and its use of the product as instructed constituted acceptance. It shows a clear offer, acceptance and consideration, forming a valid contract.

2 Hammer v. Sidway (1891): In this case, an uncle promised his nephew money if he refrained from drinking, smoking, and gambling until he was 21 years old. The nephew fulfilled this promise and the court held that the nephew provided consideration by giving up his legal right to engage in these activities, thus forming a valid contract.

3. Johnson v. Johnson (1876): A husband promised his wife a sum of money in exchange for her agreeing to separate and not interfere in his affairs. The court found that the agreement lacked consideration because the wife did not give up any legal rights or do anything that she was not entitled to do. Therefore, the contract was not a valid contract.

THE IMPORTANCE OF BARGAIN

The concept of "bargaining" has great significance in contract law because it forms the cornerstone of contract law and it provides the basis for a legally binding agreement between the parties.

Elements and validity of the contract:

1. Offer and Acceptance: A valid contract requires a clear offer by one party and acceptance by the other party, indicating that both parties agree to the terms.

2. Consideration: Bargaining requires two parties to exchange something of value (consideration), which may be goods, services, money, or promises.

3. Intention to create legal relations: The parties must intend that the agreement be legally binding, showing serious and sincere commitment.

Here are some cases demonstrating importance:

1. Williams v. Roffey Bros & Nicholls (Contractors) Ltd (1990): This case established the concept of substantial benefit or the principle of substantial benefit. The court held that if one party obtains actual benefits or avoids damage by modifying the contract, it can be regarded as valid consideration, thus strengthening the importance of consideration in contract law.

2. Balfour v Balfour (1919): In this case, the husband promised his wife a monthly allowance while they were separated for health reasons. The court held that the agreement had no legal effect because the parties had no intention of establishing a legal relationship. It emphasizes the importance of intention when entering into a contract.

3. Currie v. Misa (1875): This case emphasized that consideration is a key element in making a contract. It defines consideration as “certain rights, benefits, profits or benefits received by one party, or certain forbearances, damages, losses or liabilities given, suffered or assumed by another party”. This case helps to understand the nature of valid considerations.