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Primer on Contract Law
January 21, 2011
Background
• Contract law
– Formalize an agreement between two or more
parties
– Can cover variety of matter
– Penalties for breach of contract
Origin and scope
• Based on pacta sunt servanda
– Means pacts must be kept
• Classifications
– Tort
– Unjust enrichment
– Restitution
Elements of contract law
• Mutual assent
• Offer and acceptance
• Consideration
Formation of a contract• To actually make a contract– Each party must be able to do so
– The contract must be lawful
– Each party must consent
• Furthermore, several ways to get out of a contract– Mental incapacity
– Coercion
– Etc.
Commercial issues
• Invitation to treat
• Giveaways
– Commercials
– Television
– Radio
– Internet
Bilateral and unilateral contracts
• Bilateral
– Responsibilities on each side of the agreement
• Unilateral
– Reward contract
– Advertisement
Contractual terms
• Boilerplate
• Classification of term
– Status
– Implied
• Fact
• Law
Misrepresentation
• Involved parties need to be honest
– Cannot misrepresent themselves
– Fraud must be avoided
• Fraud in the factum
• Fraud in inducement
– Injuction
Summary
• Contract law is a complicated legal issue
• Requirements
– Entering in to a contract
– Obtaining a way out of a contract
– Preparing a contract
– Advertising a contract
References• Martin, E [ed] & Law, J [ed]. (2006) Oxford
Dictionary of Law, ed6 (2006, London:OUP). • Steyn, L. (1997) 'Contract Law: Fulfilling the
Reasonable Expectations of Honest Men' 113 LQR 433; c.f. § 133 BGB in Germany, where "the actual will of the contracting party, not the literal sense of words, is to be determined”
• Wehberg, H. (1959), Pacta Sunt Servanda, The American Journal of International Law, Vol. 53, No. 4 p.775.; Trans-Lex.org Principle of Sanctity of contracts.
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