Test Your Contract Law Knowledge

Overview of Contract Law

• A contract is a legally binding agreement between two or more parties that establishes rights and obligations.

• Contract law varies between jurisdictions, with common law requiring consideration for a contract to be valid, while civil law only requires a meeting of the minds.

• The UNIDROIT Principles of International Commercial Contracts provide a harmonized framework for international contracts, rejecting the doctrine of consideration and the abstraction principle.

• Contract law is distinct from tort law, which deals with civil wrongs committed between individuals not in a pre-existing legal relationship.

• Contracts are used widely in commercial law and can be for the sale of goods, services, employment, construction, land, and more.

• Contract theory aims to answer why contracts are enforced, with some focusing on the economic benefits of enforcing bargains and others on enforcing promises.

• Private international law allows for choice of law and forum selection clauses to determine the jurisdiction whose system of contract law will govern the contract and where disputes will be resolved.

• Contracts have existed since antiquity, and two distinct traditions of contract law emerged in the 19th century: common law and civil law.

• Common law contracts require an offer, acceptance, consideration, and mutual intent to be bound, while civil law contracts are based on Roman law and may have different requirements.

• Remedies for breach of contract include damages, cancellation, specific performance, and injunction.

• The formation of a contract requires an offer, acceptance, and a meeting of the minds, and may be bilateral or unilateral.Overview of Contract Law

• A contract is a legally binding agreement between two or more parties.

• Bilateral contracts are the most common, where both parties make promises to each other. Unilateral contracts are less common, where one party makes a promise, but the other side does not promise anything.

• Contracts can be implied in fact or implied in law (quasi-contracts) and require consideration, which is something of value given in exchange for the fulfillment of a promise.

• Consideration must be lawful for a contract to be binding, and the insufficiency of past consideration is related to the pre-existing duty rule.

• Contracts can be written or oral, with written contracts preferred in common law legal systems.

• Courts may also look to external standards and may imply a term.

• Common law jurisdictions distinguish between three different categories of contractual terms: conditions, warranties, and representations.

• Capacity of natural or juristic persons to enter into contracts is restricted on public policy grounds, and the validity of a contract can be affected by factors such as duress, unconscionability, and misrepresentation.Overview of Contract Law

• The enforceability of a contract depends on the jurisdiction's policies regarding capacity, which may include factors such as age, mental disability, and insolvency.

• Each contractual party must be a competent person having legal capacity and an agreement is formed when an offer is accepted.

• In the United States, persons under 18 are typically minors and their contracts are considered voidable, while in Singapore, minors aged 18 and above may be treated as adults for certain contracts.

• Implied terms may form a provision of the contract, which are enforceable and may arise as a result of conduct, expectations, custom, or operation of law.

• Remedies for breach of contract include damages or forms of specific relief such as specific performance, injunctions, declaratory relief, and rescission.

• Different types of damages that may be awarded for breach of contract include compensatory damages, expectation damages, reliance damages, and restitutionary damages.

• Specific performance may be ordered by a court to require that the contract be performed or an injunction may be issued to require a party to refrain from breaching the contract.

• Declaratory relief or rescission of contracts may be permitted in certain circumstances.

• Defences to claims under contract law include vitiating factors and assertions that the other party failed to perform their obligations within a reasonable period of time.

• The UNIDROIT Principles of International Commercial Contracts provides a general outline of the grounds under which a contract can be set aside.

• Voidability on the grounds of a third party's conduct is more contentious and may depend on the imputability of the conduct to the other party.

• The availability of different remedies and defences varies from jurisdiction to jurisdiction, with common law jurisdictions preferring to award damages and civil law jurisdictions being more inclined toward specific relief.Overview of Contract Law and Grounds for Avoidance

• Contract law provides a framework for legally binding agreements between parties.

• Grounds for avoidance of a contract include misrepresentation, mistake, threats and unequal bargaining power, illegal contracts, force majeure, hardship, and set-off.

• Misrepresentation occurs when a false statement of fact induces a party to enter into a contract; it can result in rescission and damages.

• Mistake is an erroneous assumption about facts or law that is material to the contract; it can provide grounds for avoidance if it meets certain conditions.

• Threats or duress can be grounds for avoidance if they leave a party with no reasonable alternative.

• Unequal bargaining power can result in inequitable terms, and contracts or terms that provide an excessive advantage can be avoided.

• Illegal contracts are void if they are based on an illegal purpose or contrary to public policy.

• Force majeure or frustration of purpose can provide grounds for termination or modification of contracts.

• Hardship can also provide grounds for modification or termination if the occurrence of events fundamentally alters the equilibrium of the contract.

• Set-off permits the netting of obligations owed by parties to each other, allowing for the discharge of mutual debts.