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Contracts - PowerPoint Presentation

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Contracts - PPT Presentation

B Com 2 HR Business Law What is a contract Definition An agreement that creates a legally enforceable obligation Discussion All contracts are agreements but not all agreements are contracts The Requirements of a Valid Contract ID: 487878

mistake contract acceptance offer contract mistake offer acceptance parties amp capacity voidable formalities void agreement impossibility common person fact

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Presentation Transcript

Slide1

Contracts

B Com 2 HR Business LawSlide2

What is a contract?Slide3

Definition

An agreement that creates a legally enforceable obligationSlide4

Discussion

All

contracts are agreements but not all agreements are contractsSlide5

The Requirements of a Valid Contract

Lawfulness

Contractual Capacity

Serious Intention to Contract

Communication of Intention

Certainty of terms

Parties of the Same Mind

Physical Possibility of Performance

Complies with Formalities

ConsensusSlide6

Lawfulness

Freedom of Contract

Generally all agreements lawful unless prohibited by statute or common law

Contra bones moresSlide7

Contractual Capacity

Capacity refers to competence in the eyes of the law to:

Have rights and duties

Perform juristic acts

Incur civil or criminal liability for wrongdoing

Sue or be sued in their own name – called legal standing or

locus

standi

in

judicoSlide8

Factors Affecting Contractual Capacity

Age

Marital Status

Mental Capacity

Intoxication

Prodigals

InsolvencySlide9

Intention to Contract

Serious intent to contract

A “ meeting of the minds”

A reasonable and serious promise

An offer as opposed to an invitation to make an offer or a statement of intent to do businessSlide10

Communication of the Intention

Can be verbal or in writing or by conduct (implied/tacit agreement)Slide11

Offer & Acceptance

Offer

Consistent with essentials of contract

Must be communicated

By

offeror

to

offeree

Must contain/define all material terms

Can I accept by saying “ yes”?Slide12

Offer & Acceptance

Revocation

Lapsing

Rejection

Request for information

Counter-offer

Options Slide13

Offer & Acceptance

Acceptance

Must be consistent with contract

Offeree

must have capacity & intend to contract

Acceptance must be communicated

Acceptance must be unconditional

Acceptance must be in prescribed mannerSlide14

Certainty of Terms

Must not be so vague as to be uncertain

Causes of uncertainty

Unlimited options

Vague language creates uncertainty

No actual contract

Unspecified factual details

Rules of Interpretation

Plain ordinary meaning of words

Ambiguity interpreted in context of whole agreementSlide15

Parties of the Same Mind

Mistake or error

Unilateral mistake – one of the parties misunderstands a specific aspect of the contract while the other party is aware of the true facts

Common

mistake – both parties misunderstand the same term, fact or aspect of the contract

Mutual

mistake – both parties misunderstand different terms or aspects of the contractSlide16

Possibility of Performance

Objective vs Subjective impossibility

Only objective impossibility leads to

voidness

Initial impossibility – void if objectively impossible

Supervening impossibility – void if impossible due to

vis major

or

causus

fortuitusSlide17

Formalities

General rule – no formalities required

Certain legislation prescribes formalities – Alienation of Land Act, Credit Act

Parties can also agree on formalities – written agreement

etcSlide18

Void vs Voidable

Void – contract does not come into being because of some fatal flaw

Voidable – contract comes into being and is valid and enforceable until set aside by court because of some flawSlide19

Mistake

Only a mistake of fact can cause contract to be void

Mistake of fact can relate to nature of contract, identity of subject matter, attributes of subject matter or identity of parties

Can be a common, unilateral or mutual mistake

Common mistake must be material

Mutual or unilateral mistake must be material

& reasonable Slide20

Misrepresentation

A false statement of fact by one person to another concerning the contract & which induces person to contract

Types of misrepresentation

Innocent

Negligent

Fraudulent

In all cases, the contract is voidableSlide21

Duress

Person induced to contract by threat of violence

Contract voidable

Contract to detriment

Only agreed because of duressSlide22

Undue Influence

Person induced to contract because of special relationship that existed

Eg

; family member, pastor, attorney

etc

Voidable if:

Contract to detriment