Contract Law - Weeks 5 & 6
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Questions and Answers

What is the primary reason a contract may be considered void?

  • One party believes they are under duress.
  • The contract violates public policy or moral values. (correct)
  • The contract was not entered into with intention.
  • One party fails to perform their obligations.

    • In the context of contract law, what does consideration refer to?

  • The intention to form a legal contract.
  • Something of value exchanged between the parties. (correct)
  • The legality of the contract's content.
  • The formal acceptance of an offer.

    • Which scenario demonstrates a valid contract?

  • Lisa accepts a contract under duress.
  • Mark and Sarah agree to a deal that involves illegal activities.
  • Tom makes an offer to sell his bike, and Jerry accepts it with an agreed price. (correct)
  • John offers to sell a car, but he has no intention to actually sell it.

    • What distinguishes a voidable contract from a void contract?

    <p>A voidable contract can be enforced until challenged.</p> Signup and view all the answers

    Which requirement must be satisfied for a contract to be recognized by a court?

    <p>The contract must involve consideration.</p> Signup and view all the answers

    What effect does duress have on the intention to form a contract?

    <p>It invalidates the intention to contract.</p> Signup and view all the answers

    Which of the following contracts is likely to be void?

    <p>A contract made under coercion.</p> Signup and view all the answers

    Which factor is not a necessary requirement for a valid contract?

    <p>Public recognition of the contract.</p> Signup and view all the answers

    What constitutes a breach of contract?

    <p>A party fails to fulfill their obligations under the contract.</p> Signup and view all the answers

    Which of the following scenarios would invalidate a contract due to lack of capacity?

    <p>A mentally disabled person enters into a service contract.</p> Signup and view all the answers

    Which element is NOT required for a valid contract?

    <p>Consideration must involve money.</p> Signup and view all the answers

    In the given contract scenario, Ahmed offers to sell his car to Budour and Budour accepts the offer. What must be present for this contract to be valid?

    <p>Both parties must have mutual consent.</p> Signup and view all the answers

    What type of contracts must be written to be enforceable?

    <p>Contracts for the sale of immovable property.</p> Signup and view all the answers

    Which of the following is a potential remedy for breach of contract?

    <p>Restitution of payment made.</p> Signup and view all the answers

    What is the legal status of a contract entered into under duress?

    <p>Voidable</p> Signup and view all the answers

    Which scenario exemplifies forcible duress?

    <p>Ayman threatens Morad with a knife to sign a contract.</p> Signup and view all the answers

    Which of the following statements about agreements between artificial persons is correct?

    <p>Artificial persons have the same legal rights as natural persons in contract law.</p> Signup and view all the answers

    Which of the following is NOT a form of misrepresentation?

    <p>Offering a contract without any verbal communication.</p> Signup and view all the answers

    Which factor is least likely to affect the enforceability of a contract?

    <p>The current economic conditions.</p> Signup and view all the answers

    Under what conditions can a contract be voidable due to misrepresentation?

    <p>If one party acts in bad faith.</p> Signup and view all the answers

    What constitutes non-forcible duress?

    <p>A threat that does not involve physical harm.</p> Signup and view all the answers

    In the case of misrepresentation by word, what must the other party be led to believe?

    <p>That the facts presented are true.</p> Signup and view all the answers

    What is the effect of a misrepresentation that is discovered after a contract is signed?

    <p>The deceived party can choose to void the contract.</p> Signup and view all the answers

    Which statement accurately reflects the duty of parties in a contract regarding misrepresentation?

    <p>Parties must act in good faith and disclose known defects.</p> Signup and view all the answers

    Study Notes

    Contract Law - Weeks 5 & 6

    • Contract law covers the code of obligations and contracts.
    • Core elements of a contract include offer, acceptance, and consideration.
    • A valid contract requires intention (without duress or misrepresentation), capacity (age and mental state), and legality.
    • Possibility of performance is also crucial for a valid contract.
    • Breach of contract occurs when a party fails to fulfil contractual obligations.
    • Remedies for breach of contract can include compensation (damages), cancellation, and specific performance.

    Definition of a Contract

    • A contract is an agreement between two or more people.
    • It creates obligations or duties for both parties.
    • Parties can be natural persons (people) or artificial persons (companies).
    • Contracts are typically written.
    • Common contract examples include marriage contracts, property sales, employment, commercial contracts (e.g. leasing, transportation, sales).

    Basic Requirements of a Contract

    • Offer: One party proposes a deal (e.g., selling a car).
    • Acceptance: The other party agrees to the offer.
    • Consideration: Both parties receive something of value (e.g., money, service, product).
    • If these 3 requirements are present, a valid contract exists, obligating both parties to fulfil their promises.

    Necessary Requirements for a Valid Contract

    • Intention: Both parties must genuinely intend to enter the contract.
    • Capacity: Both parties must have the legal ability to enter the contract (e.g., must be of legal age).
    • Legality: The contract's purpose must be legal (e.g., cannot involve illegal activity).
    • Possibility of Performance: The contract's terms must be achievable (e.g., the item to be sold must exist).

    Void vs. Voidable Contracts

    • Void: A contract that is invalid from the outset, lacking essential legal requirements.
    • Voidable: A contract that is initially valid but can be cancelled (made void) by one party if there are defects in the agreement (e.g., duress).

    Duress

    • Duress involves forcing someone to enter a contract against their will through threat or coercion (e.g., violence, threats).
    • Contracts entered under duress are usually voidable.
    • Forcible duress involves immediate threats of serious harm, while non-forcible duress involves less severe forms of coercion.

    Misrepresentation

    • Misrepresentation occurs when one party deceives the other through untrue statements or omissions.
    • Misrepresentation can be about the terms, specific details, or circumstances of the contract.
    • A contract based on misrepresentation is usually voidable.
    • Examples include fraudulent misrepresentation (lies), negligent misrepresentation (careless statements), and innocent misrepresentation (unintentional inaccuracies).

    Capacity

    • Capacity refers to the legal ability to enter into a contract.

    • Key examples of people who may lack capacity include:

      • Minors (under 18 years)
      • Mentally disabled persons

    • Minors under 13 typically have no capacity, while those between 13-17 may have limited capacity contingent on guardian approval.

    • Mentally disabled persons under a restricting order have no capacity. Contracts in these situations are void.

    • Mentally disabled persons without a restricting order have limited capacity and contracts are only valid if they benefit them or are for everyday transactions.

    Legality

    • A contract must have a lawful purpose to be valid.
    • Illegal activities (like committing a crime or buying/selling stolen property) can't form the basis of a contract.

    Possibility of Performance

    • A contract must be capable of being performed.
    • If performance becomes impossible due to external factors (e.g., destruction of the subject matter), the contract may be voided.

    Breach of Contract

    • Breach of contract happens when a party fails to fulfil their obligations under the contract.
    • The non-breaching party can seek remedies to address the breach.
    • Specific performance: Courts order the breaching party to perform the contract's terms.
    • Cancellation and restitution: Reverses the contract and returns parties to their prior positions. Financial compensation (damages) may also be sought for losses incurred.

    Case Examples

    • Several case are provided showing scenarios applying the above rules.

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    Related Documents

    Contract Law Notes PDF

    Description

    Explore key concepts and core elements of contract law in this quiz. Understand the requirements for creating a valid contract, including offer, acceptance, and consideration. Test your knowledge on breach of contract and the various remedies available.

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