Article 2.1.2 Core Doctrines of Contract Formation

Contract formation under this ICT Code shall be governed by the following provisions:

(a) Offer and Acceptance:

(i) A contract shall be formed where there is a clear and unambiguous offer made by one party and a corresponding clear and unambiguous acceptance by the other.

(ii) An offer may be revoked at any time before acceptance, unless it is expressly stated to be irrevocable for a specified period or supported by separate consideration. Offers shall lapse upon expiry of stated time limits, rejection by the offeree, death or incapacity of the offeror, or failure of a condition precedent. Silence shall not constitute acceptance unless expressly agreed or inferred from prior conduct or course of dealings.

(b) Intention to Create Legal Relations:

(i) There shall be a rebuttable presumption that parties engaging in civil, commercial, investment, or economic transactions intend to create legally binding obligations. In contrast, domestic or social arrangements are presumed not to create such obligations unless clearly rebutted by evidence.

(ii) The burden of rebutting the presumption rests with the party asserting that no legal relations were intended. Where the existence of a contract is challenged, the overall context and purpose of the transaction shall be considered to determine the reasonable expectations of the parties.

(c) Consideration:

(i) Consideration is a legal benefit conferred on the promisor or a detriment incurred by the promisee. A promise shall not be enforceable as a contract unless supported by sufficient consideration, however consideration which is sufficient shall be presumed adequate. Consideration may consist of mutual promises or acts of value and may be nominal in nature.

(ii) Past consideration shall not constitute valid consideration unless it was provided at the promisor’s request with an expectation of compensation.

(iii) Performance of pre-existing legal or contractual duties shall not constitute consideration unless additional legal detriment or benefit is conferred. Forbearance to sue on a bona fide claim may constitute valid consideration.

(iv) In limited circumstances, a promise not supported by consideration may nonetheless be enforceable where one party reasonably and foreseeably relies upon the promise to their significant detriment, and where refusing to uphold the promise would result in manifest unfairness. In determining whether such reliance gives rise to enforceability, ICT Courts may consider the conduct of the parties, the nature and seriousness of the reliance, and whether it would be inequitable to allow the promisor to withdraw the promise.

(d) Capacity:

(i) A contract may only be formed by parties with legal capacity. This includes:

(ii) Natural persons who have attained the age of majority under the applicable law in the ICT and are of sound mind;

(iii) Legal persons, such as corporations, partnerships, and other entities duly constituted in accordance with this ICT Code, acting within their legal powers;

(iv) Agents of a party provided they have actual or ostensible authority to bind the principal.

(v) Contracts entered into by minors, persons of unsound mind, or those under legal guardianship may be void, voidable, or subject to ratification depending on equity and the nature of the transaction.

(vi) Incapacity at the time of contract formation shall be substantiated with appropriate evidence.

(vii) The validity of contract formation shall be determined objectively by reference to the external manifestations of agreement between the parties.

(e) Incomplete or Evolving Agreements:

Contracts may include provisions to be determined in future, provided there is sufficient evidence of an intention to create legal relations and an ascertainable contractual framework. ICT Courts may enforce such agreements to the extent that they reflect a clear mutual commitment, legitimate expectations, and practicable obligations. Mere agreement to negotiate in good faith shall not, without more, constitute a binding contract.