Contract Law Flashcards
Contract Law
Core of contract law
exchange
Unwritten contracts
general contracts and promises, gratuitous contract (need for deed) , family contracts
DIY contracts
made by contracting parties themselves, freedom of contract (this law has the same power as those made by the legislature); generalized conditions (=ease the process in an official contract -> mandatory and default rules)
official rules
if there are no general conditions = facilitative default rules
if a contract is unlawful = doesn’t meet mandatory rules
National level: contract made by legislation
European level: directives due to limited power
international level: international conventions
informal rules
soft law -> PECL
from promise to binding contract
enforceability: INTENTION of both parties to enter into a legally binding contract
law presumes that parties will only bind themselves legally if they GAIN from the transaction
unequal obligations = circumstances must be checked
gratuitous promises are only recognized if put in a notarial deed
promises in domestic and social sphere -> social (and economic) might be eligible for compensation
offer and acceptance
consent of both parties is needed
proposal turns to offer -> intended to result in a contract if the other party accepts it
contains sufficiently definite terms to form a contract
each jurisdiction has own rules on revocation
acceptance: parties need to know at what time they are bound to a contract because rights and obligations come with it
PECL: The contract is concluded when the acceptance of the offeree reaches the offeror
protection of weaker party
contract can be orally and written if consent is reached
weaker party needs to be protected from the professional seller
formalities: information duty, written contract is needed, right to withdraw, case of incapacity (young children and mentally ill)
parties are liable during negotiations
Interpretation
Interpretation = terms of contract are unclear
two ways of interpretation
1. subjective: aim to understand what promisor wanted (prevails if both parties were able to be aware
2. objective: interpreted in the way a reasonable person with sufficient knowledge would have understood
contractual unfairness
unfairness of contract terms
-> if performance and counter-performance aren’t equivalent, contract is invalid
procedural unfairness: if a party is not able to form will in a free manner -> threat, incapability, fraud
substantive unfairness: if contrary to the requirement of good faith, it causes a significant imbalance in the parties rights and obligations -> actual consideration of the contents of the contract
prohibited contracts
automatically invalidated by legal system -> declares them VOID
Civil Law when non-performance
if a party doesn’t perform it can be forced to by a court of law
OBJECTIVE IMPOSSIBILITY (performance only possible with great effort or expense; only with personal qualities)
-> turned into damages or termination
Non-performance Common Law
if party doesn’t perform it has to pay for the damages, as a contract is supposed to increase the parties’ welfare
specific performance needed = claimant can go in equity and defaulter will be forced to perform in specie
money, repair or replacement
Damages for non-performance
Common Law: whether party is at fault or not, it is liable in damages
Civil Law: can only claim for damages when party in in breach is at fault/responsible
termination for nonperformance
can be claimed only when non-performance is serious enough -> money/ goods can be claimed back
