Kinh tế học - Chapter 7: Contract law

This is the prescribed textbook for your course.Available NOW at your campus bookstore!Copyright © 2000 McGraw-Hill AustraliaContract LawPart 1Chapter 71Copyright © 2000 McGraw-Hill Australia Valid contractAn agreement made between two or more parties, giving rise to legal rights and obligations which the law will enforce.2Copyright © 2000 McGraw-Hill AustraliaValid contract Intention to create Legality legal relations of objectTerms:- Express/implied Offer FormAcceptance Conditions Warranties Consideration Exclusionary clauses Reality of Capacity of consent parties3Copyright © 2000 McGraw-Hill AustraliaClassificationsClassificationsValidity Performance Format Formation4Copyright © 2000 McGraw-Hill AustraliaValidity5Copyright © 2000 McGraw-Hill AustraliaPerformance PERFORMANCEEXECUTED EXECUTORY One party to contract  Both parties have has completed their part obligations to of the contract perform6Copyright © 2000 McGraw-Hill AustraliaFormation FORMATION EXPRESS IMPLIED QUASI  Dependant on  By operation of associated conduct law wWRITTEN SPOKEN7Copyright © 2000 McGraw-Hill AustraliaIntention to create a legal relationshipSocial/domestic agreementBusiness agreementAssumptionNo intention to create legal relationship (Balfour v Balfour)Intention to create legal relationshipProveIntention to create legal relationship(Todd v Nicol)(Wakeling v Ripley)No intention to create legal relationship Financial disadvantage leaving job Expenses incurred in moving Selling belongings Presumption rebutted in contract8Copyright © 2000 McGraw-Hill Australia Format SIMPLE FORMAL Verbal, written, implied WrittenwConsideration must pass wDoes not require in both directions. consideration passing in both directionswStatute of limitations – 3 yrs wStatute of limitations - 12 yrs Contract of Record Contracts under Seal (Deeds)9Copyright © 2000 McGraw-Hill AustraliaEssential elements of a contractIntention to create a legal relationshipOffer and acceptanceForm and/or considerationCapacity of partiesReality of consentLegality of object10Copyright © 2000 McGraw-Hill AustraliaOfferInvitation to treat: An invitation to invite people to make offers. Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd (1952) 2 QB 795 Offer: A proposal by the offeror that if accepted by the offeree will create a legally binding contract.11Copyright © 2000 McGraw-Hill AustraliaRules with respect to offerAn offer is not required to be in any particular form.The person who makes the offer is called the offeror; the person to whom the offer is made is the offeree.An offer can be made to one or more persons, even the whole world.All terms of an offer must be communicated to the offeree.12Copyright © 2000 McGraw-Hill AustraliaRules with respect to offer - terminationAn offer can be revoked at any time before acceptance.Revocation must be communicated to offeree.An offer will lapse if: not accepted within the time stated, orwithin a reasonable time, or if a counter offer is made, or if a party loses its contractual capacity.An offer can be revoked at any time:before acceptance, andif communicated to the offeree.An offer will be terminated if rejected.Death of the offeree or offeror may terminate an offer.An offer will be terminated if a condition precedent is not met.13Copyright © 2000 McGraw-Hill AustraliaRules with respect to offer - terminationTermination of offerRejection Lapse Revocation Conditional Death of offer offeree/offeror14Copyright © 2000 McGraw-Hill AustraliaRules of acceptanceAcceptance must be communicated to offeror by an authorised person. Exception: Offeror waives the right to receive notification of acceptance. Communication by post: (postal rule): If it is agreed that post is the method of acceptance and the letteris stamped and addressed correctly, acceptance occurs when posted. Acceptance relies on the knowledge of an offer.Acceptance must be unqualified.Acceptance can only be made by the offeree.Acceptance must take place within a prescribed time or within a reasonable time.15Copyright © 2000 McGraw-Hill AustraliaConsiderationConsideration can be regarded as something done or promised by one party (the promisor) in exchange for something done or promised by the other party (mutual promises).16Copyright © 2000 McGraw-Hill AustraliaPromisor and promiseePromisorPerson undertaking to perform the considerationPromiseeRecipient of the consideration17Copyright © 2000 McGraw-Hill AustraliaRules of considerationPast consideration not valid for simple contract.Amount of consideration is irrelevant.Nature of consideration must be definite.Consideration must be able to be performed.Consideration must not be illegal or unlawful. Consideration must extend beyond what person is already obliged to do in terms of: a) requirement by law b) compliance with contract already existing.7 Consideration must move from the promisee.18Copyright © 2000 McGraw-Hill AustraliaRules of consideration (continued)Part payment of a debt will not be adequate consideration.Consideration is essential in all simple contracts.19Copyright © 2000 McGraw-Hill AustraliaPromissory estoppelIf one party to a contract, by its behaviour, leads the other party to the contract to believe a certain state of affairs exists between them, the courts will support that state of affairs rather than the terms of the contract.ElementsThe promisee has altered their position in reliance on a new promise.It would be impossible for the promisee to return to their original position without detriment.It would be unfair for the promisor to renege.20Copyright © 2000 McGraw-Hill AustraliaContracts required to be in writingTransfer of ownership of a British ship or share in a shipAppointment of an agent where the agent will be contracting by deed (Power of Attorney)Bills of exchange and promissory notesChequesAssignments and mortgages of life insurance policiesAssignment of copyrightContracts for marine insurance21Copyright © 2000 McGraw-Hill AustraliaContracts required to be evidenced in writingViaLetters passing between partiesReceipt for a depositCheque signed by the purchaser.22Copyright © 2000 McGraw-Hill Australia