Business Law To Focus On

Question 1

What is consensus ?

Answer 1

The basis of all contracts

Question 2

How is consensus reached?

Answer 2

• when all parties to the contract have true intentions
• when respectively wills through cooperation are identical
• when the aim is to create a legal obligation with certain consequences

Offer + acceptance = consensus

Question 3

What are the three categories of consensus?

Answer 3

• True consensus : which is reached expressly or through conduct (tacitly)
• Assumed consensus: which consists mainly of terms implied by the parties
• Consensus by operation of law : formed because of common law rules, legislations or trade usage

Question 4

When is a contract terminated?

Answer 4

• when there is a breach of contract by any of the parties
• when any one of the parties is unable to complete their part
• when the term of the contract has expired
• when parties mutually agree to terminate the contract

Question 5

What is contract termination?

Answer 5

When one party wishes to end the contract before the other party can fulfill the agreement

Question 6

What is an offer ?

Answer 6

A declaration of intent by a prospective party to a contract containing a proposal with certain content regarding the content of the contract bringing a legal obligation into being

(Not an invitation to do business)

Question 7

When is an offer terminated?

Answer 7

• when the offeree rejects the offer (expressly or through conduct)
• when there is a counter-offer
• when the offeror revokes the offer prior to acceptance
• when either party dies before acceptance
• when the prescribed period by the offereror expires; in the absence of a prescribed period, a reasonable amount of time has gone by

Question 8

What is the parole-evidence rule ?

Answer 8

States that if a written contract incorrectly reflects the preceding oral agreement or the true intention of the parties due to an oversight or mistake, the parties can claim the correction or rectification of the written document inorder to reflect their agreement correct

☆No external evidence is allowed because it may cause confusion

Question 9

What is mora debitoris ?

Answer 9

When the debtor delays to perform in terms of the contract

Usually:
- performance is still possible
- the debtor does not perform in time in terms of the contract
- the performance is due and enforceable
- the delay to perform is the fault of the debtor

Question 10

What is mora creditoris ?

Answer 10

When the creditor, due to his fault, fails to accept (or fails to cooperate) proper performance by the debtor

Usually:
- performance is still possible
- creditor delays performance
- proper performance has been offered by debtor
- delay due to creditors fault

•If performance is not possible because the creditor hindered the debtor ( - where parties have to perform simultaneously (reciprocity))
The defendents remedy is exceptio non adempleti contractus which means that the defendant has the right to withhold his performance until the other party performs

Question 11

What is positive malperformance ?

Answer 11

When there is performance, but not the performance agreed upon

Question 12

What is repudiation ?

Answer 12

When one party behaves in such a way that the “reasonable person” also concludes that they do not intend to fulfill their part of the contract

Question 13

What is a cession ?

Answer 13

An act of transfer of a personal right or claim

Question 14

What are the requirements of a cession ?

Answer 14

-the cedent must have a primary claim against the debtor
- the cedent must be entitled to dispose of that personal right
- the personal right must be capable of cession

Question 15

What is initial impossibility of performance ?

Answer 15

A situation where performance under a contract is objectively or absolutely impossible at the time of conclusion of the contract

Question 16

What is supervening impossibility of performance?

Answer 16

When there are unforeseeable circumstances that prevent one party from fulfilling their obligations in terms of the contract.

Question 17

What is prevention of performance?

Answer 17

when either of the parties makes it impossible for the other party to perform its contractual obligations.

Question 18

What is breach of a contract ?

Answer 18

A violation of any of the agreed-upon terms and conditions of a binding contract.

Question 19

What are the remedies for breaches of contracts ?

Answer 19

•by operations of law (remedies to which the injured party is entitled)
- claims for specific performance
- cancelation of the contract
- damages (applied with the 1st 2 remedies; if the pary is financially worse off, they are entitled to remedy their loss by recovering a suitable amount of damages

• Agreed upon remedies :
- penalty clause in the contract ( for fulfillment or cancelation)
- contractually agree to cancel the contract in the event of a breach (lex commissoria; for cancelation)
- Acceleration clause (to claim specific performance)