Kinh tế học - Chapter 8: Contract law

This is the prescribed textbook for your course.Available NOW at your campus bookstore!Copyright © 2000 McGraw-Hill AustraliaContract lawPart 2Chapter 81Copyright © 2000 McGraw-Hill AustraliaLimited capacity (of either party)Minors Persons of unsound mind or intoxicated (alcohol, drugs)BankruptsCorporations2Copyright © 2000 McGraw-Hill AustraliaLimited capacityMinor(i.e. <18 yrs)Valid Voidable Void3Copyright © 2000 McGraw-Hill AustraliaMinors - valid contract VALIDNECESSARIES BENEFICIAL CASH Involves:  Re service: TRANSACTIONS Food Education Clothing Employment Shelter Instruction Medicine Dependant on: Lifestyle Time of sale4Copyright © 2000 McGraw-Hill AustraliaMinors - voidable contract VOIDABLE VOID VALID Differs in States due to introduction of Statutes(i.e. non binding)If repudiated during minority, or within a reasonable timeof turning 18(i.e. binding)If ratified within areasonable time of turning 185Copyright © 2000 McGraw-Hill AustraliaMinors - void contract VOIDContracts for the Contracts for the payment ofrepayment of money goods supplied, or to belent supplied, other than necessariesAll “accounts stated” 6Copyright © 2000 McGraw-Hill AustraliaLimited capacity - persons intoxicated or of unsound mindVoidable contract if:(a) One party did not understand what they were doing because of the condition, and (b) the other party in the contract knew of the condition. Voidable at the option of (a) 7Copyright © 2000 McGraw-Hill AustraliaRestricted capacityBankruptsDisclosure if: - Credit in excess of $3 000 - Trading under a firm or under an assumed nameCorporationsPower to contract through individuals authorised to contract on behalf of company. (Contracts entered into prior to incorporation can be ratified on incorporation - Corporations Law)8Copyright © 2000 McGraw-Hill AustraliaConsent ConsentAbsent due to: Genuine Mistake by both partiesMisrepresentation ValidDuressUndue influenceUnconscionable conduct9Copyright © 2000 McGraw-Hill AustraliaConsent MISTAKE OF FACT OF LAW U Legal rights or obligations COMMON MUTUAL UNILATERALW Includes both parties W Includes both parties W Includes one partyW Same mistake W Different mistake W Other party knowsVoid if: Void if: Void if:W existence of subject W reasonable person W terms of contract, matter or fundamental agrees actual offer Widentity of one of fact are mistaken. and acceptance. contracting parties, or (Meeting of Minds) W nature of the document are mistaken.10Copyright © 2000 McGraw-Hill AustraliaMistakeMistake as to identity Offer intended to be made to X (identity important).Reasonable steps taken to ensure actually dealing with X.Offeree was aware the other party wished to deal with X.Common mistakeBoth parties to the contract make a mistake, but it is the same mistake. Mutual MistakeBoth parties to the contract make a mistake, but it is a different mistake.Unilateral MistakeOne party to the contract makes a mistake and the other party knows or should have known a mistake has been made.11Copyright © 2000 McGraw-Hill AustraliaConsent12Copyright © 2000 McGraw-Hill AustraliaDuressActual/threatened violence to party of contract orperson with whom they have a close relationshipVoidable - at option of injured party13Copyright © 2000 McGraw-Hill AustraliaDuressDuress against a person - enables contract to be made void.Duress against goods - not able to be used to void contract.Economic duress - enables contract to be made void.14Copyright © 2000 McGraw-Hill AustraliaUndue influencePerson uses their influence over another to force the other to enter a contract Voidable - at option of weaker partySpecial relationship Other relationship(stronger party shows (weaker party shows duress)contract made volantarily)Guardian and wardSolicitor and clientDoctor and patientTrustee and beneficiaryReligious adviser and devotee 15Copyright © 2000 McGraw-Hill AustraliaUnconscionable conductTrade Practices Act 1974 (Cwlth)One party to a contract, being in a position of power with respect to another party, forces this weaker party into the contract.Voidable - at option of weaker party16Copyright © 2000 McGraw-Hill AustraliaDisabilities involvedSicknessPovertyAgeIlliteracy17Copyright © 2000 McGraw-Hill AustraliaLegality of object IllegalCommon Law Statute i.e. against public policy * Void commission of illegal act * Illegal* Defrauds Govt. of revenue * Unenforceable* Commit unlawful act* Hinders administration of justice* Prejudicial to the institution of marriage* Sexually immoral* Promotes corruption in public life* Conflict of private interest with duty* Unreasonable restraint of trade Dependent on reasonableness of - duration of restraint - extent of restraint - interests of parties to agreement and public 18Copyright © 2000 McGraw-Hill AustraliaRestraint of tradeReasonableness in protecting goodwillPublic interest19Copyright © 2000 McGraw-Hill AustraliaRestraint of employment(unequal bargaining power)Carrying on trade or profession in competition with their employer - while in employment - after termination of contract of employment. To prevent employee from disclosing an employer’s trade secrets20Copyright © 2000 McGraw-Hill AustraliaUnequal bargaining power Using a confidential list of their employer’s customers to solicit business for themselvesDisclosing a secret processWorking for a competitor during their current employment, or assisting the competitor21Copyright © 2000 McGraw-Hill AustraliaBlue pencil testIllegal portions are deleted with a blue pencil22Copyright © 2000 McGraw-Hill Australia