Documente Academic
Documente Profesional
Documente Cultură
Prepared by :-
Musbri Mohamed
DIL; ADIL ( ITM )
Pursuing MBL ( UKM )
1
Law of Contract
What is a contract?
How to create a valid contract
Offer and Acceptance
Terms of a contract
Vitiating factors
Discharge of contracts
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What is Law?
3
Why have a Law of Contract?
4
The Law of Contract is part of Private Law so it
is concerned with relationships between parties.
It helps us to decide what is a valid contract.
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A contract is a legally binding
agreement enforceable in a court of
law. However, not every agreement
between two parties is a legally
binding contract.
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Definition of a contract
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Creating a valid contract
An offer;
An acceptance;
Consideration;
Capacity to contract; and
Intention to create legal relations.
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Definition of Offer
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Simple Example
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Identifying Offers
Statement of intention;
Supply of information; and
Invitation to treat.
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Invitation to Treat
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Who is the offeree?
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If the offer is made to the whole world then
anyone can accept.
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Knowledge of the offer
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Acceptance
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What is Acceptance?
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Counter-Offers
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The counter-offer of £950 ended the offer of
£1,000 so it could no longer be accepted.
That meant Hyde was now making a new offer
to buy the farm for £1,000.
Wrench could choose to accept or reject this.
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Classical Model
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If the parties continue negotiating then they
could change roles several times as offers and
counter-offers are made.
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Beside the fundamental elements of a contract (offer,
acceptance, and consideration), there are other
requirements:
Competence;
Consent ; and
Legality.
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Competence to make a contract means the legal capacity to make a
contract. Generally, people are ruled competent to make contracts if
they are over 18 years of age and of sound mind.
A minor (usually, a person under 18 years of age) who makes a
contract can rescind or void it, with one general exception. A minor
contracting for "necessities" is bound to pay for their reasonable
value. A "necessity" can be food or shelter but, depending upon the
law of the particular state, it may also include a car or other item. A
minor who rescinds a contract gets back whatever the other party
received from the minor.
People who are of unsound mind, that is, those who are
incompetent because of mental illness or disability, can rescind their
contracts, but the standard is high.
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Consent means that each party to the contract must agree to
the terms of the contract. This requirement of consent fits the
general idea of contract as a private law-making activity.
However, consent does not mean that you have to know what
the contract says. For example, when signing a rental car
agreement at the airport counter, you don't know what the
terms are in this contract but you agree to them by signing the
contract.
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Legal subject matter is required for a contract
to be enforceable. The law does not enforce
contracts based on illegal activity. For
example, a winner of a poker game usually
cannot go into court and enforce an IOU in a
state in which that type of gambling is illegal.
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Terms of a Contract
A contract is an agreement.
The terms of a contract express what the parties
to the contract have agreed.
A term in a written contract is often called a
clause.
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Once we know that a statement is a term in a
contract, we need to identify what kind of
statement it is.
This is important as different kinds of statements
have different remedies when a party breaches
them.
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There are 3 types of term:
Conditions;
Warranties; and
Innominate terms.
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Conditions
Or
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Warranties
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Innominate Terms
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Exclusion Clauses
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One area where the courts and Parliament have
tried to control the effect of exclusion clauses is
in contracts between business and individual
consumers.
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Dealing with Exclusion Clauses
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Included in the Contract
1.By signature
2.By notice
3.By custom
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By notice
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However, the hotel will not be able to rely on
this exclusion as the contract was made before
you got to your room.
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Vitiating Factors
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The following are vitiating factors which make
a contract void or voidable:-
Mistake;
Misrepresentation;
Duress;
Undue influence; and
Public policy.
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Valid Contracts
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Void Contracts
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Voidable Contracts
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Misrepresentation
1.A statement;
2.The statement is about a fact which can be
checked; and
3.The statement causes the party to enter
into the contract.
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A fact
Advertising hype;
Statements of law;
Statements of opinion; and
Statements of intention.
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Advertising Hype
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Types of Misrepresentation
1.Fraudulent misrepresentation
2.Negligent misrepresentation
3.Innocent misrepresentation
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Discharge of Contracts
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Discharge of Contracts
1. Performance
2. Agreement
3. Frustration
4. Breach
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An assignment is a transfer of contract obligations to
another party. It is a method of getting out of the contract
by getting somebody else to perform the obligations. The
other party to the contract usually must permit an
assignment if it is reasonable, meaning that the
assignment will not jeopardize the security of the other
party or increase its risks.
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Contracts are everywhere. They are a part of
modern life, and we enter into them, and
perform them, every day. They are necessary
to the acquisition of goods and services in the
marketplace.
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