Primer on Contract Law

January 21, 2011

Background

• Contract law

– Formalize an agreement between two or more

parties

– Can cover variety of matter

– Penalties for breach of contract

Origin and scope

• Based on pacta sunt servanda

– Means pacts must be kept

• Classifications

– Tort

– Unjust enrichment

– Restitution

Elements of contract law

• Mutual assent

• Offer and acceptance

• Consideration

Formation of a contract• To actually make a contract– Each party must be able to do so

– The contract must be lawful

– Each party must consent

• Furthermore, several ways to get out of a contract– Mental incapacity

– Coercion

– Etc.

Commercial issues

• Invitation to treat

• Giveaways

– Commercials

– Television

– Radio

– Internet

Bilateral and unilateral contracts

• Bilateral

– Responsibilities on each side of the agreement

• Unilateral

– Reward contract

– Advertisement

Contractual terms

• Boilerplate

• Classification of term

– Status

– Implied

• Fact

• Law

Misrepresentation

• Involved parties need to be honest

– Cannot misrepresent themselves

– Fraud must be avoided

• Fraud in the factum

• Fraud in inducement

– Injuction

Summary

• Contract law is a complicated legal issue

• Requirements

– Entering in to a contract

– Obtaining a way out of a contract

– Preparing a contract

– Advertising a contract

References• Martin, E [ed] & Law, J [ed]. (2006) Oxford

Dictionary of Law, ed6 (2006, London:OUP). • Steyn, L. (1997) 'Contract Law: Fulfilling the

Reasonable Expectations of Honest Men' 113 LQR 433; c.f. § 133 BGB in Germany, where "the actual will of the contracting party, not the literal sense of words, is to be determined”

• Wehberg, H. (1959), Pacta Sunt Servanda, The American Journal of International Law, Vol. 53, No. 4 p.775.; Trans-Lex.org Principle of Sanctity of contracts.