Contract Law Flashcards
Types of rules in contracts
- Made by parties themselves (DIY Contracts)
- Made by official national, European and supranational bodies
- Informal (made by others)
Types of unwritten contracts
- General contracts and promises
- Gratituous promises (gifts)
- Family contracts (normally non-binding)
- Contracting parties
Freedom of contract
Parties can make laws themselves
Parties can enter a contract if they want
–> if they do, they need to abide to rules
- Contracting parties
Generalized conditions
Standarized rules to ease the process of constructing a contract
- Official Rules
Facilitative default rules
If there arent any general conditions
- Official rules
National level
Contract made legislation
- Official rules
European Level
Directives or regultations due to limited power
- Official rules
Interntional level
International conventions
Treaties
- Informal rules
Soft law -> What source?
PECL
What is the main criterion for a contract to be enforceable?
(from promise to contract)
INTENTION from both parties to enter contract
- Contract parties -> Intention
- Gratuitous promise -> Notarial deed
- Family promises -> Often not enforceable
When does the law presume there can be intention?
When both parties gain something from the transaction
–> Exchange
A proposal turns to offer when (2):
- The other party accepts it
- Contains enough definite terms
Acceptance is considered when:
Both parties know AT WHAT MOMENT they are bound to a contract
What formalities are enforced in order to protect the consumer (weaker party)?
- Information duty
- Right to withdraw from contract
- Written contract
- Case of incapacity
–> MINORS or MENTALLY ILL cannot enter a contract
Precontractual liability
A party is liable also during the negotations of a contract
Once concluded, what problems can arise (3)?
- Interpretation
- Unfairness of contract terms
- Prohibited contratcs (void)
- Interpretation
What are the two ways of interpreting a contract?
- Subjective: In case both parties were able to understand the terms laid by the promisor -> Prevails
- Objective: If one wasn’t, the assessment will interpret it as a reasonable person with sufficient knowledge would
- Unfairness of contract terms
When does it happen?
When performance and counter-performance are not equivalent
- Unfairness of contract terms?
What are the two types?
- Procedural unfairness: If a party is not able to form its will under a free manner
- Threat
- Incapability
- Fraud (take advantage) - Substantial unfairness: looks at contents of contract
- Contrary to good faith
- Significant imbalance in parties rights and obligations
- Prohibited contracts
When does it happen?
Unlawful to public order, or morality -> VOID
What are the 3 remedies available by law when one party does not perform the contract?
- Performance
- Damages for non-performance
- Termination for non-performance
Civil law 1. Non-Performance
What happens?
- Non-performance = Can be forced by court of law
- Sometimes not possible
–> OBJECT IMPOSSIBILITY
Object impossibility
- When the performance is still possible, but with great effort or costs
- Performance requires specific personal qualities
Common Law 1. Non-Performance
What happens?
Non-performance = Party will have to pay for damages
- Money
- Specific performance
–> If not possible, performance in specie
- Repair or replacement
Civil law 2. Damages, Fault
Does fault matter? When can one claim for damages?
Can only claim damages when party is at fault
–> If not = Can call force majeure
Common Law 2. Damages, Fault
Does fault matter? When can one claim for damages?
Does not matter whether a party is at fault or not
– > Can always claim damages
- Termination can be claimed when:
When non-performance is serious enough
