Principles of Business

Topic: Introduction to Law (2)Introduction to Contract Law

Stage 2 Lecture 15

Key topics / learning outcomes of this lecture

By the end of this session, you will be able to:

• Explain what a contract is

• List the essential elements of a binding contract.

• Demonstrate understanding of the limitations of freedom to contract.

2

The story so far....

• What law is...

• Classifications of law...

• How laws are made...

• How laws are enforced...

3

4

Company Law

Employment Law

Property Law

Contract Law

Tort Law

IP Law

Areas of Law

impacting on

Business

How many contracts have you made today?

5

How many other agreements have you

made?

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What makes an agreement legally

enforceable?

Consideration

Intention

Not necessary to be in writing

8

Why is Contract Law Necessary?

Predictability of bargains

Stable economic

development

9

English Courts host contractual

disputes from around the globe

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Remedies for breach of contract

Damages Specific performance

To put C back in the position s/he would have been in, had the Contract been performed

An order to the D to fulfil his/her obligations under the Contract.

Usual remedy Equitable remedy

Less common

Contract Law

• What is a contract?

• How is it formed?

• Contractual terms

• Termination of contracts

• Remedies for breach

• Vitiating factors (aka excuses)

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A contract can:

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Anticipate future

problemsAllocate risk

Limit or exclude liability

Contracts are voluntary but:

There are limits, e.g.

• Unequal bargaining power

• Implied terms

• Onerous or unusual terms

• Special relationships

• Public policy

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A contract must have:

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Offer

Acceptance

Intention to create legal relations

Consideration

Two further important points:

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Privity Capacity

Summary

• Contract = legally enforceable agreement

• Essential to functioning market economy

• Terms can allocate risk and anticipate problems

• Limitations to freedom to contract

• Four essential elements

16

Essential work for next week

• Please consult the OLE for details of:– Essential readings*

– Seminar/workshop preparation work*

– Recommended further readings

– Any additional learning

* Essential readings and preparation work must always be completed in time for the next session

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End of presentation

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