Tort Law Case Law Analysis

Tort Law

Tort Law – Any business field is affected by many aspects that may give rise to wrongful acts which may be done by the business or by a different party to a business entity. Tort law thus comes in to deal with any sort of the civil wrongs which may arise in line of doing business, such as negligence which emanates from other sources than breach of contracts (David Ziemer, n.d.).

One of the significant court cases in this category is the Palsgraf v. Long Island Railroad Co., 248 N.Y. 339, 162 N.E. 99 (1928). This case is considered to be among the leading in the American tort law in regard to liability to an unanticipated plaintiff (David Ziemer, n.d.). When a civil wrong occurs, both the individual and business could be financially and legally responsible for the injuries caused as a result of negligence. One of the main factor relied upon when determining negligence include the breach of duty by the defendant which they owe to the plaintiff.

The case of Palsgraf v. Long Island Railroad Co., 248 N.Y. 339, 162 N.E. 99 was handled by the New York Court of Appeals. In the case, Helen Palsgraf was the plaintiff and was waiting at the Long Island Rail Road station. She was on her way to take her kids to the beach. While boarding, two men tried to get on board before the plaintiff, and one dropped a package while being assisted by railroad employees, and it exploded. The explosion caused a huge coin-operated scale located at the platform to hit Palsgraf. She started stammering after the occasion and ultimately sued the railroad (Palsgraf, Punitive Damages, and Preemption, 2012). She argued that the railroad employees acted with negligence when they were aiding the man, and it was neglect that led to her harm.

Tort Law Dissertations
Tort Law Dissertations

The plaintiff first got a jury verdict in which she was to be compensated $6,000, but the decision was appealed by the railroad. On Appellate Division, Palsgraf got 3–2 decision and the railroad appealed once more. In the New York Court of Appeals, the railroad won the case as the court overturned the original jury verdict. It was ruled that there existed no negligence as the employees did not have the duty of care to Palsgraf while they were assisting the man to board because the injury was unforeseeable harm from helping an individual with a package.

A dissent was however made stating that the employee negligently extricated the package thus dislodging it without clear knowledge of the contents in it, thus leading to the explosion which broke the scale and harmed plaintiff who was an intending passenger (Teacher, Law, 2013). The dissention held that regardless of the duty to plaintiff, the doer of negligent act should be held to account for the threat caused to other people’s safety and all its immediate consequences.

The ruling may outwardly appear to be unfair because if the employees had been more careful with the package, the harm could not have occurred. However, I agree with the ruling in that it is based on the law of tort, specifically under the liability clause. The law holds that a tort liability only occurs in the event that the defendant breaches a duty of care, which such defendant is owing to the plaintiff, and in turn this act of negligence leads to injury being sued for. This is the concept which was accepted in the American tort law after the ruling made by the New York Court of Appeals (Teacher, Law, 2013). This case shows how the law deals with the proximate cause of the injury in connection to negligence.


David Ziemer. (n.d.). Duty of care remains thorny issue in Wisconsin law. Wisconsin Law Journal (Milwaukee, WI)

Palsgraf, Punitive Damages, and Preemption. (2012). Harvard Law Review125(7), 1757–2012

Teacher, Law. (November 2013). Palsgraf v Long Island Railroad – Case Brief

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Lawsuits Apple versus Samsung

Case Law on Apple versus Samsung – Patent Infringement

Title: Apple Samsung Lawsuits – Cornish, W., Llewelyn, G. I. D., & Aplin, T. (2013) Intellectual property: patents, copyright, trade marks & allied rights.

Patent infringement can be described as an act of making, selling, using or offering to set an invention that has been protected by government for the rights of inventor. In this report, a case of Apple vs. Samsung has been analyzed and discussed using critical understanding by referring the literature. In addition to this, supporting cases are also analyzed to provide understanding in the area of legal risk management. The report concludes that patent infringement cases are very critical and differ according to legal requirements of different countries. From the analysis of the case study, it was found that Apple and Samsung are going through a long lasting battle of patent infringement. Both have faced serious consequences of this battle due to different legal perspectives.

Case Summary and Analysis

Apple and Samsung are two technology giants have their number of lawsuits between each other relating to tablets and smart phone designs. This technology battle is very significant because these two companies contribute almost half of the smartphone market share across the world. The two parties which are claiming each other are two major technology giants Apple and Samsung. However, it Apple remained in winning position in most of the cases. A brief description of the two parties has been provided before discussing the main issues of the case in order to give introduction to these two companies.

About Parties

Apple Inc

Apple is an American multinational electronic company that is often characterized for offering best quality and innovative electronic products such as tablets, smartphones, laptops etc. It was founded in California, America in 1976 by Steve Jobs and since then, the company has placed it in number one position in hardware and electronic industry. Its products iPhone and iPads are considered as revolutionary innovation in the electronic world.

Samsung Group

Samsung group has five major business units including Samsung electronics company, Samsung telecoms etc. It is a South Korean multinational company that is comprised of number of subsidiaries and affiliated business organizations. The company was founded in 1938 by Lee Byung-chul and emerged as one of the largest electronics companies in the world.

Main Issue

Apple made the very first case against Samsung by suing it for four design patents on 5th January 2007. In response to the same, Samsung also filed a case against Apple for violating colour design patent of 193 screen shots of many iPhone graphical use cross points. Apple made a claim on its component provider Samsung in more than 10 countries including USA, South Korea, Germany, Australia, Netherlands, and Japan etc. Thus, the patent battle between Apple and Samsung has become an international case related to patent infringement. The key issue in this case is to identify if Samsung or Apple have infringed the patents of each other.

Apple has sued Samsung because the company is trying to protect its patent provided by the government for new invention. The issue has become more significant because Apple cannot protect all of its patents because technology is changing very frequently. In such a scenario, only specific features like “princh stretch” can be protected. Therefore, Apple won a court case against Samsung for $1.05 billion because of patent infringement by Samsung for copying a specific feature. Samsung also sued Apple for the same and won in few cases where it did not copy specific features. Both companies are major rivals in electronic industry and hold specific market share therefore, will never back down and accept that they were wrong. Thus, the battle is not going to end easily to the give case scenario.

What did Samsung Copy?

O’Rourke, M. (2011) Apple and Samsung Wage Patent War. Risk Management. 58(10). p.6.

Samsung had a basic production on tablets before Apple’s innovative product iPad launched. After launching of iPad 2, Samsung changed its designs of tablets and Google alleged Samsung to copy Apple’s iPad. The key design violations by Samsung are discussed here under:

Violation 1 Samsung infringed the design patent by introducing a feature of enlarging the text by double tapping on the screen. Thus, Samsung introduced the zooming feature that was being used by Apple in its iPads.
Violation 2 Apple was the first company that offered a feature of bouncing back after scrolling. Samsung also violated this design patent in its smartphones.
Violation 3 Ornament design was used by Apple in iPhone 3 that was used by Samsung for its future models. The shape of iPhone was rectangular in shape and the same was adopted by Samsung later.
Violation 4 Samsung was also alleged to copy the shape and feature of icon alignment in a row or column that is a user friendly interface. Samsung can with the same interface that is used in android systems of Samsung.

What did Apple copy?

In response to the above claims, Apple was also sued by Samsung because it was accused for using the same architecture design icons in iPhones which were used by the Samsung smartphones. Thus, Samsung electronics filed a lawsuit against Apple iPhone 5 which was released recently. Apple was accused to use the same features and GUI interface that was used by Samsung. Thus, Samsung alleged that Apple’s iPhone 5 shape is unreasonable rectangular shape which was copied by infringing the patents.

Federal Complaints in Court

Cusumano, M. A. (2013) The Apple-Samsung lawsuits. Communications of the ACM. 56(1). pp.28-31.

The following federal complaints were filed in the courts of various countries of which few lawsuits are stated below:

South Korea

The South Korea court revealed that Samsung was in fault for infringing patents by violating Apple’s design patents. Nonetheless, the court also awarded the little damages to both Apple and Samsung. South Korean court gave the judgement in neither of the parties by banning the products of Apple and Samsung in the country. Samsung was ordered to stop marketing its 12 products and Apple was asked to ban iPhone 3gs and iPad 1 and iPad 2 in South Korean market.


Samsung was sued by Apple for two patent infringements in the federal court of Japan but court denied to take any action. The court held that the technology used by these two companies was different and therefore, complaint filed by Apple was stroked down by them.

British Lawsuit

According to statement of British court, galaxy product of the Samsung was not copied and iPad and galaxy are products with different technologies. By this judgement, Apple lost the case against Samsung in United Kingdom as court held that there was no point to claim.


In federal court of Australia, Apple was a clear winner because on this case of patent infringement, Samsung was found guilty in legal grounds and ordered to ban galaxy tab in Australian market.

United States of America

The USA case against Samsung is considered significant in this battle because court clearly favoured Apple and held that Samsung copied the technology used in iPhones and iPads. Thus, all the tablets and smart phones of Samsung were banned in USA and court also imposed huge penalty on Samsung.

Problems in Finding References

During this study, I found issues in reading and finding related literature because of unauthorized access on some website. There are many premium website which allow user to get data only on subscription. Due to financial constraints, I had to find alternatives which was time consuming and difficult. Furthermore, the other issue I faced during finding references was identification of appropriate key words.  Patent infringement is a wider term and there are all unique cases relating to this. Thus, it was difficult to identify supporting cases and references for the same. For this, I used rational approach and identified the list of patent infringement cases. Then, I used key words based on initial literature review to solve this issue. I have used enough literature to create better understanding on this case and analyze the same.

Apple Samsung Lawsuits
Apple Samsung Lawsuits

Analysis and Reflection on Legal Grounds

From the analysis of the given case study, it was found that both Apple and Samsung are in losing position due to this patent war. On the one hand, Samsung has to pay penalty of billions and on the other hand Apple lost its reputation in few countries. However, Samsung been biggest loser in this battle because there were serious financial and reputational implications.

Crampes, C., & Langinier, C. (2002) Litigation and settlement in patent infringement cases. RAND Journal of Economics.  pp. 258-274.

The patent laws in USA provide for granting patents to any person/organization invented new, ornamental and original design for an article for manufacturer. The manufacturing items under the scope of patent law include smartphones, peripheral, software icons and other automobile parts. However, it is important to note that three types of patents are there but the scope of this law does not cover utility patent. However, the patent rights granted to Apple being an American country is confined to the territory of USA and thus, there will be no effect in other countries. Almost every nation has its own patent law and a person who wants protection of any kind of patent in any country is subject to laws applicable on that particular country regarding patent infringement.

Bosworth, D. L. (2014) Intellectual property rights. Elsevier

The above discussed case is not applicable for a single country because Apple and Samsung have entered into an international battle by suing each other in more than 10 countries for patent infringement. The law suggests that before determining the patent infringement, it is important to compare overall appearance of the accused design and the claimed design. It was found that Apple won the battle in some countries like USA but it also lost the case in some countries. The decisions made by different federal courts were based on their patent regulations and guidelines. Thus, it will not be wrong to state that both Apple and Samsung were not able to effectively protect their intellectual property rights and faced difficulty.  On the basis of legal grounds and analysis, the cost of these actions of Apple and Samsung and future implications of the same are presented below:

Cost of These Actions

Wingfield, N. (2012) Jury awards $1 billion to Apple in Samsung patent case. The New York Times (August 24, 2012).

Apple had claimed federal complaint on its supplier Samsung in many countries whereas Samsung also filed the case on Apple for copying 5 patents of Samsung. The cost of taking these actions remained too high for these two organizations because finally, some of the products of these companies were banned in some countries that caused huge loss to reputation of Apple and Samsung. In addition to this, this billion dollar patent dispute between these Samsung has led one of the biggest losses due to penalties for patent violations in legal history ever.

Lawsuits Future Implications

Jeruss, S., Feldman, R., & Walker, J. H. (2012). The America Invents Act 500: Effects of Patent Monetization Entities on US Litigation.

There are serious implications of this legal battle that can be discussed in financial, reputational and market terms. Countries like South Korea banned some of the products of Apple and Samsung due to which the companies lost significant market share and reputation. Apple’s biggest competitor Google can re evaluate its product designs and strategies to protect itself from any legal action. The Apple remained in the strong position and therefore, it can become world’s most valuable company. Samsung lost the share value because of this patent battle that has made Apple to gain competitive advantage in long run.

Analysis and Conclusion on Other Case Studies

Innogenetics, N.V. v. Abbott Laboratories, 512 F.3d 1363 (Fed. Cir., 2008)

Innogenetics Biotechnology is a company that is dealing with diagnostics assays, multi parameter testing and in the field of severe infectious diseases whereas Abbott labs is a health care company involved in activities like discovering medicines and new technologies for well being of people. Innogenetics was provided patent for the method of detecting a particular disease which was copied by Abbott labs. Innogenetics won $7 million against Abbott for infringement of patent. Although, Abbott gave an argument that the technology used was a raising technology. Court gave the judgement on the grounds that applicant is not required to convince specification. The technology was already known earlier therefore, innogenetics won the case. However, Innogenetics succeed in protecting the right to offer injunction in the market. From the analysis of the case study, it can be stated that Abbott was not able to defend itself on justifiable grounds because of pre existence of the technology.

Microsoft Corp. v. Motorola, Inc. (Fed. Cir., 2014)

The case of patent infringement was initially filed by Microsoft Inc. against Motorola in the District Court of Washington in year 2012. The reason for the claim was that Motorola was alleged to violate reasonable and non discriminatory agreement. During this US litigation, Motorola sued Microsoft in Germany for patent infringement. However, the patent battle has come to an end and the jury has ruled the case in favour of Microsoft and awarding the company $15 million in damages. The judgement was based on the argument that Motorola has breached the US agreement. From the analysis of the case study, it can be said that patent infringement cases are very complex to make decision because there is a thin line between current and new technology.


In this report, the case of Apple vs. Samsung has been analyzed using the existing literature including supportive cases and legal guidelines. It can be concluded that every country has its own regulation on patent protection. In the technological field, patent infringement cases are very common whether they are related to design, utility or knowledge. Thus, it is important to review each and every aspect of the case for taking the judgement. Legal application can be confined to a single territory in most of the cases therefore, before launching a product companies should ensure that no such legal agreements are breached. It can also be commented that patent cannot be considered as a right option all the time because in the case of infringement, the final decision takes a pretty long time. By the time, when decision is taken, technology may have reached the window of opportunity could have closed for patent owner that happened with Apple. However, the typical outcomes could be monetary damages, exclusion order, mediation, injunction relief and negotiated settlement.


Bosworth, D. L. (2014). Intellectual property rights and Lawsuits. Elsevier.

Cornish, W., Llewelyn, G. I. D., & Aplin, T. (2013) Intellectual property: Lawsuits patents, copyright, trade marks & allied rights.

Crampes, C., & Langinier, C. (2002) Litigation, lawsuits  and settlement in patent infringement cases. RAND Journal of Economics.  pp. 258-274.

Cusumano, M. A. (2013) The Apple-Samsung lawsuits. Communications of the ACM, 56(1). pp.28-31.

Innogenetics, N.V. v. Abbott Laboratories, Lawsuits 512 F.3d 1363 (Fed. Cir., 2008)

Jeruss, S., Feldman, R., & Walker, J. H. (2012) The America Invents Act 500: Effects of Patent Monetization Entities on US Litigation.

Microsoft Corp. v. Motorola, Inc. Lawsuits (Fed. Cir., 2014)

O’Rourke, M. (2011) Apple and Samsung Wage Lawsuits and Patent War. Risk Management. 58(10), 6.

Wingfield, N. (2012) Jury awards $1 billion to Apple in Samsung patent case Lawsuits . The New York Times (August 24, 2012)

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English Law Legal System

History of the English Legal System

English law refers to the legal system of England and Wales which is the also, the basis of common law in Ireland and other Commonwealth countries.

Justice in ancient England both under the Anglo-Saxon regime and thereafter the Norman invasion, 1066 was delivered through a mix of local and royal courts. The local courts were presided over by a Lord or one of his stewards while the King’s court – the Curia Regis, was presided over by the King himself, and the royal courts began to emerge from the same. However, over a period of time they began to usurp the jurisdiction of the local courts. Under the Norman’s the practice of assizes was started by virtue of which judges were send across the country to hear cases locally. This laid the foundation for a common law to be applied to the whole country as it enabled the judges, over a period of 200 years, to take the least local laws and apply them throughout the land. This led to the establishment of common law courts. However, in course of time the remedies offered by the common law courts proved to be inadequate. The litigants in these cases petitioned the King as the fountain head of justice for appropriate relief. Due to ever increasing petitions, the King finally established the Court of Chancery administered by the King’s Chancellor adjudicating claims on the basis of equity.

Rule of English Law

The British Constitution is founded on the principle of rule of law. While C.J Edward Coke introduced this term to the world of legal terminology but it was essentially A.V. Dicey who propounded this doctrine and assigned to it several meanings. Its primary meaning is that everything should be done according to law or in other words no action whatsoever can challenge the supremacy of law. The secondary meaning is that Government’s discretionary power should be restricted by making them operate within a framework of recognized rules and principles. A third meaning of rule of law is that disputes as to the legality of acts of the government are to be decided by judges who are independent of the executive. To understand the concept of Rule of Law, which serves as the foundation of most legal systems of modern world, it is pertinent to appreciate the three features of this doctrine i.e. supremacy of law, equality before law and predominance of legal spirit.

The study of Rule of law in context of separation of powers of the organs of state especially the legislature and the judiciary, although it has never been applied in England in strict sense. As we all know, The British Parliament designed in accordance to Westminster model is a combination of House of Lords, House of Commons and the Queen commands as a supreme legislative body. Whereas, the supreme court of England maintains the stand of independent judiciary. Separation of powers, in simple words would mean that each organ can function without the influence of another. For instance, parliament is restricted from commenting on conduct of judges or any case pending before the judiciary whereas on the other hand the members of judiciary no longer have the privilege to amend the Bills laid down in Parliament. But since there is no strict application, the organs reserve the right to maintain checks and balances. It is in this sense only that the British Constitution though largely unwritten, is firmly based upon the principle of separation of powers. Thus, the exercise of the sovereignty of the British Parliament is also, subject to rule of law, although to a limited extent.

Common Law and Equity

The law of England may be said to be composed of three important elements: common law, equity and legislation or statute law. In simple words, common law may be defined as the part of English law derived from customs and judicial precedents and is not based on statutes. As such, in the absence of codified legislations, laws made by judges of common law courts based on common sense of reasoning and common customs that were recognized by the judges in their judgments came to formulate the law of the land known as common law. This is why it is also, known as law by precedent.

Due to inadequacy of effective redress available to the litigants in the King’s Court, the King through his Chancellor set-up a court known as the Court of Chancery, to provide redress in such cases. This laid the foundation for the development of law based on equity. It was based on the principle that when common law remedies would prove inadequate to grant relief in a particular case, the Court would grant relief based on equitable principles. It basically means a set of legal principles which supplement strict rules of law where their application would cause unwarranted injustice to either party.  It is usually said to mitigate the rigour of common law, as it allows the courts to use its discretion and apply natural law in order to render justice more effectively. As such, it is also, important to note that in cases of conflict or variance between rules of equity and the rules of common law, the rules of equity should prevail. One of the important principles of equity is: he who comes to equity must come with clean hands. This means that a person seeking equitable relief should not have contributed to his injury or acted unjustly in any manner in relation to his injury or the defendant.

English Law Legal System
English Law Legal System

In the modern system of English law, statute law forms an indispensable part of the legal system. It is the most important source of law and takes precedence even over Common law. Common law can be changed by legislation, but cannot override or change statutes. In simple words, statute refers to a set of codified laws which are passed by legislatures. They are different from judge-made common laws in the sense that they are enacted to deal with specific situations or to govern a particular aspect of society. The legislature has the power to formulate laws relating to any aspect on which they have the authority to govern. For example, the Companies Act, 2006 is an act of the Parliament of United kingdom which forms the primary source of UK Company Law.

Statutory Interpretation

Statutory interpretation usually, refers to the process of interpreting legislation in the light of a factual scenario. It refers to certain set of principles developed by courts to interpret statutes. Some statutes take the aid of simple words with straightforward meaning to serve its object. In such case, interpretation does not pose any serious problem. However, when the Parliament enacts legislation, it is not possible to capture all the circumstances which may arise out of the same. As such, there may be ambiguity or vagueness that arises from the words used in the legislation. This is where the art of statutory interpretation applies. The judiciary through the aid of interpretation seeks to reconcile the legislative intent behind the enactment with the situations such legislation seeks to address. There are four primary rules of interpretation, the literal rule, the golden rule, the mischief rule and the purposive approach.

One of the difficulties that are faced by English courts while interpreting statues is perhaps where there is no assistance provided by treaties. This can be said as the drawback of not having a written constitution as there remains uncertainties with regard to legality of other statutes. Even if courts step forward to apply common law principles or ordinary literal meaning, there will exist a conflict as to choice of which principle of interpretation should the court lean on. Although there has been some success in this regard by development of presumptions that are applicable in case there can be two different interpretations of same statute.

So by this we come to understand that the words used in a statute, in so far as they are unambiguous, are the greatest reflection of the legislative intent.  In this regard, two canons of interpretation are very important. First, the courts must seek to ascertain the legislative intent as it is only then that it can effectuate the purpose of the law. Secondly, an interpretation that suppresses any absurdity or ambiguity in the law is to be adopted.


“No Act of Parliament can be unconstitutional, for the law of the land knows not the word or the idea.” A constitution refers to a general covenant by virtue of which the spheres of influence of the government and its organs stand defined in relation to the state. The British Constitution is unwritten and as such it has not yet been codified. Most democracies of the world are governed by a codified constitution. In this sense, the British system is unique. Constitutional experts in England are of the opinion that an understanding of what the British Constitution involves entails a thorough analysis of several sources such as the Acts of Parliament, treatises, law of the European Union, Common law, Conventions, Royal Prerogatives and work of authority. In the British Constitution, power flows to the respective organs of the Government from the Crown. As such, one of its unique features is the arbitrary and unaccounted nature of power of the Government. However, the Crown although nominally, retains four key constitutional powers like the appointment of the Prime Minister, the power to dissolve the Parliament, the power to dismiss the Government and the power to withhold royal assent to legislation passed by the Houses of Parliament.

Court System

The Court system of a country usually refers to the system of law courts that administer justice and constitute the judicial branch of the government. It is important to note that the English court system is a complex structure of different courts adjudicating upon respective matters and sometimes even over conflicting claims. Therefore, the following chart is presented for a simplified understanding of the English court system.

Until October 2009, the final court of appeal for civil and criminal cases from England and Wales was the Appellate Committee of the House of Lords. However, the Supreme Court has now replaced it as the highest court in the United Kingdom. The Court of Appeal has only appellate jurisdiction for both civil and criminal cases. The High Court of Justice and the Crown Court have the power to exercise both appellate and original jurisdiction.

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Legal Contract Law

Legal Contract Law

The most common definition of a contract stipulates that it is a legal binding form of an agreement; in other words a contract is an agreement that is enforceable by law (John A. Willes, 2009). On the other hand, under the sherman act an agreement defined as a fundamental ingredient or component of a contract (Turner, 1962). Thus, from these definitions, similarity between a contract and an agreement can be concluded. However, there are few elements separate between them, and identify the term contract as inclusive and legally binding form of agreement (Humphries, 2004).  In order to form a contract an agreement must be reached between the involved parties. Thus, an agreement is the most essential component of a formal contract; consequently in that sense, any contract is basically an agreement between specific involved parties (Turner, 1962). On the contrary, individuals may reach agreements between them every day, but not in all circumstances these agreement can be considered as legal contracts enforced by law. To be regarded as a contract, an agreement must fulfil the requirements and conditions necessary to form a legal contract (John A. Willes, 2009).

In order to critically analyse the statement “all Contracts are agreement but not all agreements are contracts,” it must be discussed in the light of the main elements of a valid contract. The essential elements of a valid contract respectively are: offer, acceptance, consideration, intention to contract, capacity to contract, consent to contract, legality of form and legality of purpose (John A. Willes, 2009). An offer is a proposal presented by one party to buy or sell goods or provide a service. In more general terms it is a proposal to do or to give something. To be regarded as an agreement, an offer must be accepted by the second party; consequently the second element of a valid contract is acceptance. Acceptance is agreement of the second party or the offeree to the specific terms of the offer (John A. Willes, 2009). Once the offer is accepted it can be considered as an agreement; however to be considered as a contract, it must fulfil the remaining conditions of a legally binding contract which will be discussed respectively.

Legal Contract Law
Legal Contract Law

While offer and acceptance might be inferred from the conduct or the words of the involved parties, the conduct or words must conform to particular rules that have been formed before acceptance could be considered as legally valid (John A. Willes, 2009). These rules have been formed by the courts over time, and they are the remaining elements of a valid contract which must be fulfilled for an agreement to be considered as a contract. These are: consideration, intention to contract, capacity to contract, consent to contract, legality of form and legality of purpose (John A. Willes, 2009).

Consideration means that the goods or services exchanged between the involved parties must be real, adequate and legal (John A. Willes, 2009). Intention to contract refers to involved parties’ willingness to be a part of a legal contract.  Therefore, involved parties must know that they are about to form legal relations which cannot be broken or violated (John A. Willes, 2012). Capacity to contract condition states the cases and conditions required for a specific person to be entitled to enter a legal contract. These conditions include but aren’t limited to sanity and maturity (John A. Willes, 2009). A person who is under the age of eighteen is not allowed to be involved into a legal relation (John A. Willes, 2009). For, example, an agreement can be reached between two parties which both or one of them is a minor, but in this case a legal contract doesn’t exist. In this circumstance, the statement under discussion is explicitly applicable. Consent to contract means that a person cannot be enforced to enter a contract, and it should be subject the free will of involved parties. For instance, if a marriage contract is created by forcing or threatening the groom to marry the pregnant pride, it is not considered as a valid contract (Humphries, 2004).

The last two elements are legality of form and legality of purpose; Legality of form means that a valid contract must be formed in accordance with specific legal roles. For instance, Rules specify that a valid house buying contract must be written and cannot be oral. Legality of purpose means that the contact would only be considered as valid and legally binding if it only was made for legal transactions specified by law (John A. Willes, 2012). To illustrate, an agreement could be reached between two parties for the exchange of illegal product; however, a legal contract cannot be established because legality of purpose rule was not fulfilled. Under the previous circumstances, the statement “all Contracts are agreement but not all agreements are contracts,” is valid.


Humphries, A. (2004) Essential Features of a Valid Contract.

John A. Willes, J. H. (2012) Contemporary Canadian Business Law-10th Edition. Mcgrow-Hill.

John A. Willes, J. H. (2009) Fundamentals of Canadian Business Law-2nd Edition. Mcgrow-Hill.

Turner, D. F. (1962) Definition of Agreement under the Sherman Act: Conscious Parallelism and Refusals to Deal.

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