KTR211
Example
Case
Legislation
CHAPTER 1: THE NATURE AND BASIS OF A CONTRACT
The notion of contract
Contract as an agreement (if no agreement – there is no
contract) intended to create enforceable obligations –
o Contract is a TYPE of agreement between two/more parties,
BUT not all agreements are contracts:
Couple agree that husband will wash dishes after
dinner, this is not a binding contract/agreement entered
into as a joke or in a play.
Parties to social and domestic agreements do not
intend their agreement to give rise to legally binding
obligations.
Factor that distinguishes contracts from non-binding
agreements is aminus contrahendi (serious/want
intention to create legally enforceable obligations).
Absence of aminus contrahendi makes agreements
not enforceable.
Whether or not parties intended their agreement to be
binding in law is a matter of fact to be determined by
available evidence.
Where a party lacks aminus contrahendi but leads
the other party into reasonable belief that they
, seriously intended to bind them, the law will protect that
reasonable belief and uphold the contract despite the
absence of genuine agreement.
Legally binding agreements that are not contracts:
o The fact that parties seriously intend their agreement to have
binding legal effect does not necessarily mean that it is a
contract, not all binding agreements are contracts.
o Some agreements are intended to create obligations
(Obligationary Agreements) but to destroy them (Absolving
Agreements) or honor an obligation by transferring rights
(Real/Transfer Agreements).
o Obligationary Agreements (IS A CONTRACT: creates
reciprocal obligations) –
If nothing on evidence that shows parties lack of
capacity, we assume they have capacity.
Performance is certain and it is also possible to
perform it as nothing on facts suggest otherwise.
Both parties know and agree on performance each
must perform and have consensus, with regards to that
and unless the agreement is required to be in a certain
form, there are no formalities.
If object of sale is not prohibited by statute or common
law then it is legal (there is a contract).
Like sale and lease –
Obliges seller to transfer sold thing to purchaser
who is bound to pay.
If purchaser cancels the sale, then that is an
Absolving Agreement (NOT A CONTRACT: does
not create reciprocal obligations).
, The obligation of the purchaser to pay is a
bilateral juristic act.
The obligation of the seller to transfer ownership
to the purchaser would take place by traditio
(physical element – delivery of thing) (mental
element – concurring intentions on part of the
seller and the purchaser to transfer [aminus
transferendi]and acquire ownership [aminus
acquirendi]).
o Real/Transfer Agreement (NOT A CONTRACT) –
To agree when, where, why and how to sell the right is
contract but the actual transfer of rights is not a
contract, it’s the performance of an
agreement/honoring of an obligation.
Mental element of traditio.
Obligationary Agreement is the underlying reason
(causa traditionis) for the transfer.
Cession:
If someone has right to claim money from
another arising from contract/other source of
obligation.
They can sell the right to claim money.
Sale of rights is a contract/obligatory agreement
that obliges seller of rights to transfer rights to
purchaser.
Sale itself does not transfer right (achieved by
cession which is a separate agreement entailing
concurring intentions: to transfer rights on sellers’
part and take transfer on purchasers part).
, Legally binding agreements that are more than just contracts –
o Some legally binding agreements that create obligations for
the parties cannot be regarded as merely contracts because
they contain elements giving another dimension
altogether/elevating them into a separate category:
Marriage –
agreement sui generis – giving rise to a
relationship that confers on the parties a status of
a public character.
Primary purpose is not creation of obligations,
and many normal principles pf law of contract
don’t apply to it.
Cannot be made/unmade by free exercise of will
of parties without intervention of the state.
Certain invariable consequences that cannot be
excluded by parties.
Judgment by consent –
Parties to litigation that conclude an agreement
settling issues in a dispute ask court to make
order that reflects terms of agreement.
Judicial act with all authority, force, and effect of
any order of court.
Remains in substance a contract of the parties
but has elevated status.
Agreements entered into with public bodies or organs
of state –
Example
Case
Legislation
CHAPTER 1: THE NATURE AND BASIS OF A CONTRACT
The notion of contract
Contract as an agreement (if no agreement – there is no
contract) intended to create enforceable obligations –
o Contract is a TYPE of agreement between two/more parties,
BUT not all agreements are contracts:
Couple agree that husband will wash dishes after
dinner, this is not a binding contract/agreement entered
into as a joke or in a play.
Parties to social and domestic agreements do not
intend their agreement to give rise to legally binding
obligations.
Factor that distinguishes contracts from non-binding
agreements is aminus contrahendi (serious/want
intention to create legally enforceable obligations).
Absence of aminus contrahendi makes agreements
not enforceable.
Whether or not parties intended their agreement to be
binding in law is a matter of fact to be determined by
available evidence.
Where a party lacks aminus contrahendi but leads
the other party into reasonable belief that they
, seriously intended to bind them, the law will protect that
reasonable belief and uphold the contract despite the
absence of genuine agreement.
Legally binding agreements that are not contracts:
o The fact that parties seriously intend their agreement to have
binding legal effect does not necessarily mean that it is a
contract, not all binding agreements are contracts.
o Some agreements are intended to create obligations
(Obligationary Agreements) but to destroy them (Absolving
Agreements) or honor an obligation by transferring rights
(Real/Transfer Agreements).
o Obligationary Agreements (IS A CONTRACT: creates
reciprocal obligations) –
If nothing on evidence that shows parties lack of
capacity, we assume they have capacity.
Performance is certain and it is also possible to
perform it as nothing on facts suggest otherwise.
Both parties know and agree on performance each
must perform and have consensus, with regards to that
and unless the agreement is required to be in a certain
form, there are no formalities.
If object of sale is not prohibited by statute or common
law then it is legal (there is a contract).
Like sale and lease –
Obliges seller to transfer sold thing to purchaser
who is bound to pay.
If purchaser cancels the sale, then that is an
Absolving Agreement (NOT A CONTRACT: does
not create reciprocal obligations).
, The obligation of the purchaser to pay is a
bilateral juristic act.
The obligation of the seller to transfer ownership
to the purchaser would take place by traditio
(physical element – delivery of thing) (mental
element – concurring intentions on part of the
seller and the purchaser to transfer [aminus
transferendi]and acquire ownership [aminus
acquirendi]).
o Real/Transfer Agreement (NOT A CONTRACT) –
To agree when, where, why and how to sell the right is
contract but the actual transfer of rights is not a
contract, it’s the performance of an
agreement/honoring of an obligation.
Mental element of traditio.
Obligationary Agreement is the underlying reason
(causa traditionis) for the transfer.
Cession:
If someone has right to claim money from
another arising from contract/other source of
obligation.
They can sell the right to claim money.
Sale of rights is a contract/obligatory agreement
that obliges seller of rights to transfer rights to
purchaser.
Sale itself does not transfer right (achieved by
cession which is a separate agreement entailing
concurring intentions: to transfer rights on sellers’
part and take transfer on purchasers part).
, Legally binding agreements that are more than just contracts –
o Some legally binding agreements that create obligations for
the parties cannot be regarded as merely contracts because
they contain elements giving another dimension
altogether/elevating them into a separate category:
Marriage –
agreement sui generis – giving rise to a
relationship that confers on the parties a status of
a public character.
Primary purpose is not creation of obligations,
and many normal principles pf law of contract
don’t apply to it.
Cannot be made/unmade by free exercise of will
of parties without intervention of the state.
Certain invariable consequences that cannot be
excluded by parties.
Judgment by consent –
Parties to litigation that conclude an agreement
settling issues in a dispute ask court to make
order that reflects terms of agreement.
Judicial act with all authority, force, and effect of
any order of court.
Remains in substance a contract of the parties
but has elevated status.
Agreements entered into with public bodies or organs
of state –
