Understanding Contract Law

Overview

• The lecture aims to enable students to identify and understand the law of contract
• Key areas covered include why business executives should study contract law, contract definition, basic principles, and elements for valid contract formation.

Why Study Contract Law?

• Contract enforcement is recognized as the foundation of modern commercial law
• Contract law forms the substrata of business/commercial law

Concept of a Contract

• It binds parties together
• Parties intend it to be legally binding
• It legally binds people to specific obligations and rights
• It gives rise to obligations that the law enforces or recognizes
• Sir Frederick Pollok described it as an agreement consisting of exchanged promises that can be enforced
• Requires an offer and acceptance with mutual intention for it to be binding and enforceable at law, per Kobaku Associates v. Owusu
• Contracts are voluntary, deliberate, legally binding agreements

Key Traits

• Based on an agreement
• Agreement comprises mutually beneficial terms
• Promises between parties that are enforced by a court

Contract Examples

• Employment contracts
• SPAs, selling/buying of goods and international commercial/trading activities

Guiding Principles

• Facilitates exchange of goods and services
• Creates legal rights and obligations that allow exchange to take place; per Adagewine (2014)

Contractual Rights and Obligations

• A "right" means an entitlement that a person have, and must continue to have
• An "obligation" means a specified duty to act/not act
• Rights/obligations are created by agreements/promises
• Rights/obligations are voluntarily undertaken by parties to a contract

Binding Promise

• Parties must honor the contract terms
• Parties intend to be bound by mutually exchanged promises
• Legitimate expectation is created from parties exchanging promises
• Breach of a term creates disappointment/economic loss and a cause of action
• Cause of action is a factual situation that entitles a party to a remedy in court

Intent

• Promises with no intention to create legal relationships, like those "in jest," is considered a breach
• Breaching such a promise is unlikely to result in legal action
• Binding contract requires an obligation to honor contract terms
• Binding contract require parties to clearly intend to adhere to mutually exchanged promises

Parties

• Contracts are made by those who wish to do business
• Parties must be persons, natural or legal entities
• There cannot be any question about the identity/capacities to contract

Subject Matter

• Every contract must have a subject matter
• The subject matter is what the parties promise to do, or not do
• Subject matter must be lawful and align with public policy/morality

Freedom of contract

• Parties are the best judges of their own interests

Freedom of contract enforcement

• Courts respect/enforce contract terms if parties enter it voluntarily, with capacity under law

Sanctity of Contract

• Obligations are voluntarily undertaken and must be abided by
• Courts compel parties to keep promises, unless the terms of the contract are illegal, onerous, unjust, or unfair

Privity of Contract

• A contract generally only benefits/provides rights to the parties involved, not third parties

Elements for a Valid contract

• Offer and acceptance
• Intention to create legal relations
• Consideration
• Capacity and legality of the parties

Offer definition

• Willingness to contract on certain terms with the intention that are binding upon acceptance, per NTHC v Antwi
• Proposal by one person (Offeror/Promisor) to another (Offeree/Promisee) expressing intentions to enter a contract if the offer is accepted

Offer formation

• Can be made in words/writing/conduct

How Offers are Made

• Orally, though contracts for land sales are an exception
• In writing; creating a binding contract when the party accepts/communicates acceptance
• An offer is inferred from conduct or how a person acts
• A reasonable person would think intention to contract on certain terms

Key Requirements

• Must include explicit terms and conditions; upon which both Offerer and Offeree are expected to meet

Terms

• Forms the base on which Offeree accept/reject

Precision

• Terms must be clear, precise, and defined
• It enables parties to understand
• Minimizes disputes

Ad Idem

• Without ad idem there are no shared understanding/agreement, and courts are unable to perform

Raffles v WWichelhaus 159 E.R. 375

• Where the contract stated the contract is shipping names "peerless" sailing from Bombay
• The court held that there was no contract because there were two ships with the exact name but sailing on different months

Communicating Offers

• The opposing party can accept/reject
• It can be communicated in writing, via words, or by specified conduct

Target

• Offer must reach the intended Offeree, a specific person, class, or the whole world

Business Relationships

• Intended business relationships between Offeror and Offeree cannot occur unless the Offeree is made aware of the intention to contract.

Objective Test

• Tests the theory of contract applies if the offer can not be made to the Offeree.
• Under common law, the principle states that intention are based on judgments from the reasonable conduct of a person.

Valid Acceptance:

• Offer communicated to non-intended person.
• If communicated, it leads to contract being formed.
• Once an identifierd/ named person has to acceptance of the Offeree must to occur.

Objective Intention

• The objective intention of the Offeree is paramount

When is it valid to perform the duties of the Offeree

• If an objective of the intent if the Offeree has to enter into a contract with individual members or as a unit.

What are the forms of the duties of the Offeree

• To take all the rewards form the act or to request for a performances based on the whole world.
• Any member of the public can accept by fulling the conditions of this contract
• Must be aware of the intentions of the Offere to make the contract valid and in the knowledge and absence will cause it to not constitute as a contact.

Key cases

• Read Carlill v Carbolic Smoke Ball (1982) 2 QB 484.

Final Offer

• The offer has to be definite and final
• Supreme court of Ghana states in NTHC v. ANTWI that the offer must give terms and can make it an inviatatoin to treat.
• "We may be prepared to sell to you
• Gibson vs. Manchester City Council

Offer vs invitation

• Contemplate eventual contcutal but the offer is not the intent to have a imminently contract result. And it may exemplary
• Display goods
• Advertiments
• Auction Sales

Display of goods

• Did not amount to have and offer of goods.
• In Fisher V Bell is the court held that there was no contract if price has a ticked attached, and is therefore not an offer but treat

Offer and Ads

• Advertent the goods is nota to sell the goods, but is an invitation to treat.
• In partddige V, critterdend says the advert in the magazine said the Bramble finich , hold that the advert was a treat rather than an offer to enter contact.
• promises contained in advertisements can constitute valid Offers.

The Exceptions for Advertisement

• However it there there is a promise which can enter into a contract, whoever acts on the promise contained in the advert, has
• the pharmaceuticals company caused the advertisement to be made saying that anybody used a specific drug as a curse. and still cause a threat. carli Bough the drug, this led to the court holding that the advert. The issue was wether its treat or not.
• Williams V Carwardine 1988 (Kings bench) Was help once a person is available, offer for the reward. performance of the act constitue valid acceptance. is person offer and performing.

Auto sales

• is not a contractual offer.
• Harris v. Nickerson it was held that notice the certain date, accept turning on state time
• action contain and the quality.

Termination of an offer.

• Mode, and revocation to be made any time before offer id accepted

Valid rejection

In Time V. Hoffman hold that country of her rejected the original offer, you couldn’t create by binding court

A counteroffer

• Kills offer
• Hude V. Wrench 1940 where defend made plaintiff to offer sale, but then agent went to defendant and offered 950. Defend as to consider. offer killed

Lapsing Death

• Offer terminates or lapses, After states. It will be therefore be invalid. See Ramsgate. Victoria CO v Montifiore.

What is the right for one with no time stated?

• Manchester dicensan for education vs commercial, stated had within with it must be implied for reasonable time.

Offer and Deaths

• Offer terminates/lapses if
• Offer terminates/lapses. If and accept it during his life.

Acceptance

• to Agree
• Refer Final qualified man of essent in terms, means qualified agreement of an offer to certain terms.
• Write or draw. And implied you must, and offeree the file and first
• It must be made by the offer while still enforce
• And a transformer transforms what ever transforms an offer has to be accepted to the offering to be a true contract

Absolute Exceptance

• Meant that it must exactly look like the images and terms of the offer, and must exactly be the the same as the offer must exactly match the terms of must agree to the turns must appear, with in
• Any other and except there is could need to rejection. Has defect the other - side v wrench

How not to exxpect

• Must not account offer. The other wise the offer is to acceptance will have to receive it in order to offer by another.

Offer accept and communicated

• If one fails to communicate that if it’s invalid, national.
• Acceptance must be computer to to offer. Similar security V hugs.

Silence

• Silence is not
• Acceptance, it can't state silence is
• Accept, therefore,

Requirements for offer acceptance

• the state. It should be binding on all side with other to contract.
• Question: I'm with if is not enough formation. This comes in valid

Explore the essentials of contract law, focusing on its importance for business executives. Learn about contract definitions, fundamental principles, and the necessary elements for creating valid and enforceable agreements. Key concepts include offer, acceptance, and mutual intention.