Notes on Contract Law that is part of module Private Law 1, taught in Semester 1 at THUAS. The notes are thorough and include everything taught in the course.
You can also purchase my bundle of Private Law 1 course at THUAS taught in Semester 1 (consists of Contract, Property and Tort Law).
- A legally binding agreement that will be enforced by law
- States OBLIGATIONS between the parties of the contract
- In case of failure to perform these obligations it gives the right to a REMEDY
Contracts ensure that society can function because agreements are enforceable, and people make their
own agreements, not the State!
Types of contracts;
Types of parties:
B2B – Business to Business
B2C – Business to Consumer
C2C – Consumer to Consumer
Reasons for performance:
a) A promise in exchange for a promise – BILATERAL CONTRACT (exm. The sale of a bike)
b) A promise in exchange for an act – UNILATERAL CONTRACT (exm. Reward for
information about a crime)
Also types of performance!
PARTY AGREEMENT; standard form contracts, general terms
FORMAL SOURCES OF LAW; national law (civil/common law tradition), rules, regional law (EU
law), international law (CISG)
INFORMAL SOURCES OF LAW; non-state organizations, academics, non-binding (principles,
DCFR)
GENERAL CONTRACT LAW PRINCIPLES
1. FREEDOM OF CONTRACT
= the autonomy of parties to make the choices they desire (the State does not enforce the
contract!);
o On whatever terms (freedom with regard to content)
o Whenever desired (freedom to contract or not to contract)
o With whomever (freedom to choose the other party)
Although still limited. All conditions of the contract have to be legal, otherwise the contract cannot be
legally enforceable.
2. BINDING FORCE
, = agreements lawfully entered into have the force of law between the parties
o Binding (there are consequences following if the contract is breached)
o Party in default must compensate the party not in breach
o Unless terms are deemed unfair or prohibited by law
3. INFORMALITY
= contracts do not require any particular form
However, a particular form may be required by law for certain contracts to be valid
4. CONTRACTUAL FAIRNESS
= a contract should show procedural fairness; unequal position between parties is remedied
Not the same as substantive fairness (you can sell the house worth 50,000 Euro for 50 Euro if both
parties agree, even if other deem it as a ‘bad contract’
CONTRACT FORMATION
Offer
Acceptance
Intention = CONTRACT
Formality
Capacity (of parties to be bound by a contract)
Lack of vitiating factors (invoulintarity and such)
FORMATION OF AN AGREEMENT
Consensus ad idem; to have the same understanding of the terms of agreement
Only when there is MUTUAL ASSENT (parties are of the same mind) will the courts hold them to
their agreement
IMPORTANCE OF AGREEMENT
The PROMISOR (offeror) makes the offer and the PROMISEE (offeree) is the person to whom
the offer is made.
The acceptance of offer creates an agreement, which if legally enforceable is a contract!
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