Contract Law PDF

Contract law  The law that governs contracts Contract  Defined as legally binding agreement between two or more persons indented to create an obligations between them.  It is a promise for the breach of which the law provides remedy  If one party breaches the contr...

Contract law  The law that governs contracts Contract  Defined as legally binding agreement between two or more persons indented to create an obligations between them.  It is a promise for the breach of which the law provides remedy  If one party breaches the contract the none breaching party can sue the breaching party for remedies Classifications of contracts 1) Contracts by deed  Special contracts, with special requirements must be satisfied in order for them to be valid, legally binded  Must be in written form, signed, dated, delivered, witnessed 2) Simple contracts  All other contracts 3) Bilateral contracts  Contains two promises, one by each party 4) Unilateral contracts  One promise in exchange for an act  Contains two promises, one by each party 1 Formation of a contract Legally binding contract must have the following 4 elements 1) Offer Rules about offers  Party which makes the offer = 1. Must be definite in its terms Offeror 2. Both parties must know what  Offeror gives the offer with the exactly what they agreed to intention, that if accepted it will 3. The offer may take several forms become binding contract 4. Written, oral form, performed by  Offer is given to = Offeree contact  Offer can be addressed to world at 5. It can be addressed to anyone large, single person, particular 6. Offer is capable of acceptance, only person, group of people by the offeree only who knows  Offer = Proposal about its existence Offer can be terminated = to bring to its legal end I. By acceptance or by refusal  Offeree can refuse the offer II. By counteroffer  Terminates the original offer and only the offeree has the right to give the counteroffer III. Revocation  Right of the offeror, only before accepted  The offeror gives the offer, offeree accepts the offer = Too late for offeror to change his mind = Once the offer is accepted, it’s too late for revocation IV. By lapse of time  The offer expired V. By the death  If the offeror dies VI. The goods involved were destroyed or damaged 2  2) Acceptance  Agreement to all the terms of the offer  The offeree has the right of acceptance  Must be unconditional = Without introducing any new terms, that would create counteroffer which terminates the original offer  Is not needed in unilateral contracts = Offer is accepted for example when posted 3) Consideration  The heart of the contract = The very reason of its existence  Something of value, is exchanged for something else of value  It make take several forms = usual form of money  Must have some economic value, but it doesn’t need to be adequate 4) Intention to create legal relations  Contracts which are not meant seriously = No intention to create legal relations  Contracts between family members and friends Contractual capacity  Most adults have it  The ability to understand that contact is being made and to understand its general nature  Not all people have the same contractual capacity = Children – insane – intoxicated adults have limited 3 Vitiating factors of the contract 1) Misrepresentation  Representation = All the statements, which are made or formed before parties enter into a contact. These statements are meant to persuade the party to enter into a contract. (brand name or original price). If these statements are false, it is called Misrepresentation.  Party which is called mis representee = Has the right to resign the contract as well as claim damages for misrepresentation.  Misrepresentation = An untruth statement of the fact made by one party to another. Types of misrepresentation a) Fraudulent misrepresentation  Deliberate dishonest b) Negligent misrepresentation  Careless false statement c) Holy innocent misrepresentation  The mis representer didn’t know the statement that he made was false 2) Mistake  Misunderstanding about a matter of fact Types a) Identical mistake  Mistake shared by both parties b) Bilateral mistake  Parties misunderstood each other c) Unilateral mistake  Only 1 party to a contact is under misunderstanding 4  3) Duress  Undue influence or unfair pressure, which is out on a party in order to enter into a contract  When the party is forced to enter into a contract, they are not acting on their own free will 4) Illegality  The subject matter of a contract is illegal, so it is not lawful contract Discharge of contracts  The termination of contractual obligations Contract comes to an end 1) Performance  The contract is discharged when both parties have performed their obligations  They did what they agreed on 2) Agreement  The contract is formed by agreement and can be also discharged by agreement  Parties have to agree to replace an obligation or agree to cancel the contract 3) Frustration  The unforeseen termination of a contract as a result of an event, that either makes the performance impossible or illegal  This becomes without the fault of either party  Happens when the subject matter of the contract was destroyed or damaged; some new laws make the subject matter of the contract illegal 4) Breach of the contract  Non-performance without excuse 5 Remedies for breach of contact 1) Damages  The aim of rewarding damages is to put the non-breaching party into financial position as if the contract had performed  Common law remedy 2) Equitable remedies  Specific performance is that the court orders the defendant to fulfil his obligation 3) Injunction  Another type of equitable remedies  Orders one party to a contract not to do something which is in the breach of the contract 4) Rescission  Means treating the contract as if it had never existed  Cases of misrepresentation or duress Exemption clause  This clause is the part of the contract which limits of excludes liability  In some cases, this clause is the part of the contract which doesn’t have to be signed, but the party must be informed Conditions to apply exemption clause  The contract must be in written form and signed  It must be in plain English-easy to understand  It must be clear, not confusing  It must be a part of a contract  It must not be prevented by statue 6 Property law  Is law concerned with the rights and obligations that arrives in relation to everything which can be owned  Property is anything which can be owned The ownership rights include  The right to use  The right to prosses  The right to enjoy  The right to transfer = The right to sell, or decide who will inherit the property after the original owner  The right to exclude others = When other people want to use, they must ask for permission  Immunity from damage The object of property  Almost all tangible things can be subject or object of property Natural resources  Some of natural resources have been in some legal systems removed from private ownership  In some legal systems some natural resources have been removed from private ownership = That are subject to public or state ownership  But in some countries individuals/corporations are granted special licenses or permissions to use or to benefit from natural resources  Generally it works like they are granted some license or permission, they pay some fees and they allowed to use 7 Human body  Either living or death whenever it is or its not object of private property, many jurisdictions have special legislation of this topic  It is still not really strictly stipulated in law because there are still some points of interest as for example giving the blood; the body organs after the death; whole body for medical purposes after death Property classification  Tangible (corporeal)  Real tangible  Can be proceed by our senses  House  We can see it, touch it  Real intangible  Intangible (incorporeal)  Interests in land  You can not  Personal property (movables)  Real property (immovables)  Everything else is personal  Defined as a land and anything erected on it, growing on it or  Personal tangible attached to it  Car, book, jewellery  Personal intangible  Interests in land 8  I. Right in rem  In the past if dispossessed of real property the claimant had a right to get back the very thing he had lost and was enforced by real action II. Right in personaem  If dispossessed of anything else a person’s only right was monetary compensation and was enforced by personal action Possession  Means holding a thing  This is defacto relationship, it is the right of control over property, which also includes the right to use  Ownership is de inure Types of possession 1) Actual  Situation in which the person exercises direct physical control over a certain item  Holiday car rent = The car will be in possession 2) Constructive  The person has the power and the intend to control over the thing, but doesn’t exercise it at given time  I will be invited to invited at wedding, and I need to borrow jewellery from my neighbour = If just borrow but not wear it will be in my constructive possession 3) Adverse  Acquiring title to real property by occupying it for a certain period of time  After that period of time it will change from possession to ownership  (In UK 12 years) 4) Illegal  Anything stolen  Drugs, guns 9 How to acquire things  By sell contract  By inheritance  By gift from someone  By create something  By finding something What can be found I. Lost thing  The rights of original owner are superior comparing to the one who finds II. Abandoned thing  Who found the abandoned thing their rights are superior than the original owner III. Mislaid  The owner of the real property has the right over to mislaid property 10 Intellectual property = IP  No general accepted definition of this  It refers to various legal entitlements which are connected to certain type of information; ideas or other intangibles, in their expressed form 1) Industrial property  Matters of commercial nature  Trademarks, industrial design 2) Copyright  Artistic or literal works  It does not protect the idea itself, but it protects the tangible expression of the idea  Main feel of the IP  It applies to artistic creations  The copyright is established from the very first moment that word is fixed in intangible media of expression.  No copyright in speech unless its recorded Criteria Duration  Work must be original, can’t be  It depends on the author existing same work  Copyright starts to exist from the  It must possessed some level of very first moment when the word is creativity fixed; published  © = Copyright notice = Date of When the author is anonymous, and the first publication, name of the he is the copyright holder copyright holder  Protection lasts during his life  70 years after his death When the author is known and he is the copyright holder  Protection lasts during his life  70 years after his death When the author is anonymous  The copyright will last 95 years after the publication of the work or 120 years after the creation of it 11 Doctrine = Work for hire  The copyright holder = Employer  Author who does the the work = Employee  In some cases copyright owns the institution one works for  In most cases the author of the work is also the copyright holder, however under this doctrine the employer of the author becomes the copyright holder What does it applied to  Literally works  Applies to internet websites  Dramatic works  Musical compositions  Artistic works = photographs Doctrine of fair or free use  It limits the right of copyright holder  It allows to make copies without the permission of the copyright holder Assignment Licensing  Transfer of copyright in a way that  Another form of transfer copyright holder sells his  Copyright owner retains his ownership to a 3rd party ownership but he authorizes 3rd  If he rights are assigned, the person party to carry out certain acts for they were assigned will become specific time in connection with his new copyright holder copyright work  In return the author will get back a payment = Royalty 12 Features of IP rights  Negative in nature  We all have rights which are positive in nature = vote, go to school, choose religion  Negative rights = Give owner of the rights the ability to exclude others from inferencing of his monopoly. Only the owner of these rights has the ability to exercise them and it prevents others from using these rights.  Holder of these rights can start an action at the court of law if someone violates the rights connected to Intellectual property  If anyone wants to exercise these rights he needs a permission from the owner = licence agreement = Granting a permission; Licenser = Providing the license; Licensee = Person receiving the rights  Some of these rights are transferable = Owner of the book can transfer financial profit to another party but not ownership  Its not illegal to make copies and doing other activities than copy = Distributing, selling  Most exclusive rights are awarded and protected by the government = Must be reegistered Licence agreement The parties involved 13 Patents  Some authors believe that patent can be understood as a contract between society and individual inventor  Their invention must need some strict but very logical criteria  In order to have a patent one has to apply to it = Not automatic right = Trademark office  Holder is called patentee = Has some exclusive rights = Exclude others from making, using or selling patented invention during certain period which the patent is granted Main categories Utility  This is granted for any new inventions or discoveries for any new useful process, machine  The item must be useful  Lasts 17 years Design patents  Granted to who invent who invent new original design for of  Lasts 14 years Plant patents  Who invents and discovers or asexually reproduces any distinct new variety plant  Lasts 20 years Criteria  Must be new and useful  It cannot be of a straight forward nature = Cannot be very simple very logical, too obvious  The national law must provide for the possibility that particular item patented 14 Trademark  One of the most visible forms of the intellectual property  Symbols of fast food restaurants, used by international producer of clothing or equipment  When its unique enough and doesn’t become generic  In order to establish trademarks rights = They do not need to be registered  When its used continually it comes into being   = registered trademark, TM = not Symbol  It is any commercial indicator = Name, symbol, word, sign  Distinctive sign used in order to identify certain good or services  Producers do not want others to use the same symbol Trade secret  Is anything that gives its owner a competitive business advantage  Not generally known  Negative nature = Used to prevent anyone from disseminate trade secret 15 IP infringement  Unauthorized use of someone’s ip rights can be classified as crime  IP rights can be enforced either through civil remedies but they also involve criminal submissions  The right holder can obtain financial compensation = Damages which are awarded to compensate Copyright infringement  Is infringed when the whole work or its substantial part is sued without authorization of the copyright holder  Unless the use of copyrighted word falls to exception which permits the little uses  Can be classified as piracy = unauthorized reproduction and illegal distribution of copyrighted material  Plagiarism = theft of another person artistic creation Patent infringement  Unlicensed manufacture, use or sale patented invention without the permission of patentee Counterfeiting  Fake replicas of some real original products on which the trademark is placed 16