How can you tell if an oral contract has been made?

Checklist (the same for any contract whether written or oral): 

  1. OFFER - a statement of the terms on which the offeror is willing to be bound.

  2. ACCEPTANCE - clear acceptance to the terms of that offer

  3. CONSIDERATION -   a benefit which must be bargained for between the parties, and is the essential reason for a party entering into a contract.

  4. MUTUALITY OF OBLIGATION -  both parties must be bound to perform their obligations or the agreement. 

  5. INTENTION TO CREATE LEGAL OBLIGATIONS - implied readiness of a party to accept the legal sequences of having entered into an agreement.  

  6. COMPETENCE AND CAPACITY - Are both parties competent and capable to make this agreeement?

In the following examples, is there an oral contract in existence?

1) My friend Sam asks me to look after his pet cat while he is holiday and in return I don't have to pay him back that £15 I owe him from last week. I say 'I'd love to. No problem.' On the day that Sam is supposed to go on holiday,  I decide I have too much on my plate, and tell Sam that I will no longer look after the cat.  

  1. Lucy is the managing director of a film production company. At an awards ceremony she gets talking to Leonardo DiCaprtio about a new film her company is making. Leonardo says he read the script already and thought it was brilliant.  She says that if he'll play the main role, he'll get paid £30 million. Leonardo says that sounds like a great deal and to "count him in, 100%".  In the following weeks, Lucy's company starts commissioning the film. When they try to organise rehearsal dates with Leonardo, he says 'I've decided against it. You'll have to find someone else'.
Answered by Evie S. Law tutor

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