Read the text. For statements (1–5) choose “True” if the statement is true according to the text, “False” if the statement is false:

A contract is an agreement between two or more parties, which is enforceable in law. A valid business contract, for instance, must involve an offer to supply goods or services, consideration (the price to be paid) and acceptance by the purchaser. The offer may be revoked at any time before acceptance but this must be communicated to the purchaser. Acceptance of an offer must mean agreement entirely with the terms of the offer.

The terms may be expressed or implied. It is the terms of the contract which determine the extent of each party’s rights and duties and the remedies available if the terms are broken are determined by the comparative importance of the terms.

If an uncertain term is actually meaningless, then exceptionally the court may be prepared to sever the provisions if it is clearly superfluous. There is a general rule, ‘the parole evidence rule’, that where a contract is embodied in a written document, then extrinsic evidence is not admissible to add to, vary, subtract from or contradict the terms of the written document. In addition, the object of the contract must not be illegal; it is against the law for two people to make a deal between themselves if this involves committing a criminal offence.

It can happen that in an apparently valid contract, consent to the agreement does not express the true intention of the consenting party, and he or she may therefore not be bound by it. This may arise from mistake, misrepresentation, fraud, duress or undue influence.

There are few rules about the form of contracts, although some contracts have to be written – for example, the sale of land or a house. The seller and purchaser exchange a written contract and, once the exchange takes place, the seller is obliged to sell to the purchaser and vice versa.

An increasing amount of statute law is designed to protect consumers. Legislation, for example, covers the sale and supply of goods and services and the way that goods and services are described. It also regulates the marking and accuracy of quantities.

An example of a contract is the purchase of goods in a shop. The purchaser can sue the seller in the civil courts usually for damages. Conversely, if the ownership of the goods passes to the purchaser and they are not paid for, the seller can sue for the price of the goods. Similarly, an employer is bound to pay an employee for work done; if he or she fails to do so, a breach of contract action can take place.

Statement: Usually the salesman is persecuted for damages by the civil court