2020 11 26 Module 3

Contract law formation centers on three essential elements: agreement, consideration, and the intention to create legal relations. Consideration requires reciprocal benefit and detriment, though cases like *Williams and Roffey* introduce complexities regarding existing contractual duties and practical benefits. Intention to create legal relations relies on rebuttable presumptions, where domestic arrangements typically lack such intent unless strong evidence exists, while commercial agreements carry a strong presumption of enforceability. Contractual terms are classified as conditions, warranties, or intermediate terms, with the latter requiring an assessment of whether a breach deprives the innocent party of substantially the whole benefit. Finally, exemption clauses serve as defenses against claims of breach, negligence, or misrepresentation, provided they are properly incorporated, clearly worded, and compliant with the Control of Exemption Clauses Ordinance.