Introduction To Contract Law

Question 1

What is contract law?

Answer 1

A body of law that governs the creation, execution, and enforcement of agreements between parties

It outlines legal principles ensuring parties fulfill their obligations and provides remedies for breaches.

Question 2

What elements must be present for a valid contract?

Answer 2

• Offer
• Acceptance
• Intention to create legal relations
• Consideration
• Capacity to contract

Each element is autonomous and interdependent, and if any is absent, there can be no valid contract.

Question 3

Define ‘Offer’ in contract law.

Answer 3

A clear and unequivocal proposal by one party to enter into a legally binding agreement

The offer must contain specific terms, leaving no room for ambiguity.

Question 4

What is ‘Acceptance’ in the context of contracts?

Answer 4

The offeree must accept the offer without modifying its terms, signifying mutual assent

Acceptance forms the contract when communicated effectively.

Question 5

What does ‘Intention to create legal relations’ mean?

Answer 5

Both parties must intend for their agreement to be legally binding

This distinguishes contracts from mere social or domestic arrangements.

Question 6

What is ‘Consideration’ in contract law?

Answer 6

Something of value exchanged between the parties, forming the price paid for the promise of the other party

It can be monetary or otherwise.

Question 7

What does ‘Capacity to contract’ refer to?

Answer 7

The legal ability of the parties to enter into a contract, excluding minors and persons of unsound mind

Entities lacking legal standing are also excluded.

Question 8

What is the principle of ‘pacta sunt servanda’?

Answer 8

The doctrine that agreements must be kept, ensuring that contracts freely entered into are honored

It reflects the autonomy of individuals and entities in contractual engagements.

Question 9

What is a formal contract?

Answer 9

A contract that must be written or typed and executed with a seal

It is enforceable even in the absence of consideration.

Question 10

Describe a simple contract.

Answer 10

Any contract that is not formal and can be made orally or in writing

Only a party who has furnished consideration can enforce a simple contract.

Question 11

What distinguishes express contracts from implied contracts?

Answer 11

Express contracts have clearly stated terms, while implied contracts arise from the conduct of the parties

Implied contracts are inferred from actions rather than words.

Question 12

Define bilateral contracts.

Answer 12

Contracts involving an exchange of promises between two parties

Both parties are bound by mutual promises, even before performance begins.

Question 13

What is a unilateral contract?

Answer 13

A contract where one party makes a promise in exchange for performance by another party

The classic example is a reward offer for finding a lost item.

Question 14

What is ‘consensus ad idem’?

Answer 14

The meeting of minds necessary for a contract to be valid

Without mutual agreement on terms, no enforceable contract exists.

Question 15

True or False: A contract can be formed without a clear offer and acceptance.

Answer 15

False

Both elements must be present for a contract to exist.

Question 16

What is the role of courts in enforcing contracts?

Answer 16

To uphold the terms of contracts as agreed upon by the parties

Courts are reluctant to interfere unless the contract is illegal or tainted by fraud.

Question 17

What is the significance of the case ‘A.G Rivers State v. A.G Akwa-Ibom State’?

Answer 17

It emphasized the enforceability of contracts based on the doctrine of pacta sunt servanda

The court upheld a maritime boundary agreement despite one party finding it unfavorable.

Question 18

Fill in the blank: A contract under seal is enforceable even in the absence of _______.

Answer 18

consideration

This makes it a valuable tool when consideration is lacking.

Question 19

What type of agreement was inferred by the court in Avero Memorial Hospital Ltd?

Answer 19

An implied retainership agreement

This was concluded from the conduct of the parties involved.

Question 20

What distinguishes a bilateral contract?

Answer 20

An exchange of promises between two parties

Both parties are bound by mutual promises, even before performance has commenced.

Question 21

Provide an example of a bilateral contract.

Answer 21

One party agrees to pay another for building a house

Both parties are legally bound by their promises.

Question 22

What defines a unilateral contract?

Answer 22

One party makes a promise in exchange for performance by another party

The promise is accepted through performance rather than verbal or written acceptance.

Question 23

What is a classic example of a unilateral contract?

Answer 23

Carlill v. Carbolic Smoke Ball Co.

The defendant offered £100 to anyone who used its product and still contracted influenza.

Question 24

In the Carlill case, how was the offer accepted?

Answer 24

Through performance by the plaintiff

The plaintiff used the smoke ball and caught influenza, thereby fulfilling the terms of the offer.

Question 25

What constitutes consideration in a unilateral contract?

Answer 25

The act of providing information or returning a lost item

This performance makes the contract enforceable.

Question 26

True or False: A unilateral contract requires both parties to exchange promises.

Answer 26

False

A unilateral contract involves one party making a promise in exchange for performance.

Question 27

Fill in the blank: A bilateral contract is formed through an exchange of _______.

Answer 27

promises

Question 28

What is a common scenario where unilateral contracts are used?

Answer 28

Reward cases

For example, an offeror promises to pay for information or the return of a lost item.