Introduction- The Theory And Function Of Contract

Question 1

What is the basic definition of a contract?

Answer 1

An agreement between two or more parties creating obligations which are enforceable by law.

Question 2

What type of rights are contracts?

Answer 2

Personal rights (jus in personem)

Question 3

What part of the law do contracts belong to?

Answer 3

Obligations- legally enforceable rights and duties

Question 4

What are the primary values of a contract?

Answer 4

1) freedom- the ability to agree to any terms which are not forbidden by the law
2) certainty- performance should be made as certain as possible

Fairness has a weak role

Question 5

What is the Latin for agreements must be kept?

Answer 5

Pacta sunt servanda

Question 6

What type of law is contract mainly composed of?

Answer 6

Mostly common law, however the institutional writers are also major influences. Also some legislative intervention, for example the Unfair Contract Terms Act 1977

Question 7

What are the three main justification theories for contract law?

Answer 7

Promissory theory
Will theory
Reliance theory

Question 8

What is promissory theory

Answer 8

Moral argument that ones word and promises should be kept

Question 9

What is will theory

Answer 9

Courts will effect to the combine intentions of the parties

Question 10

What is reliance theory

Answer 10

Courts protect those who suffered loss in relying on contract

Question 11

What are the essential elements of a contract?

Answer 11

Consent of the parties
Contractual capacity in them
Determine and lawful subject matter

Question 12

What are the functions of a contract?

Answer 12

Makes promises enforceable
Adjudicates disputes
Regulates commercial relationships

Question 13

What is the lifecycle of a contract?

Answer 13

1. Pre contractual negotiation
2. Contract in existence
3. Vitiation
4. Content
5. Remedies