Lecture 4 - Contracts

Question 1

What is contract law?

Answer 1

Contract law is the area of law that deals with making and enforcing agreements between parties.

A balancing act between freedom to contract as well as predictability and fairness to both businesses and their clients or customers

Question 2

5 criteria for a valid contract?

Answer 2

consensus, consideration, capacity, legality, and intention

Question 3

Consensus

Answer 3

“meeting of the minds” or “mutual assent.” It indicates that all parties involved understand and agree to the terms and conditions of the contract.

Question 4

Consideration

Answer 4

It refers to something of value that is exchanged between the parties involved in the contract. People need to benefit.

Question 5

Capacity

Answer 5

refers to the legal ability of a person to enter into a binding contract. If a person lacks capacity, any contracts they enter into may be voidable, meaning that the incapacitated party has the option to either enforce the contract or void it.

Question 6

Aspects of capacity

Answer 6

Age: All people in the agreement must meet the legal age. Legal age varies depending on country, province, etc.

Mental competency: Individuals must have sufficient mental capacity to understand the nature and consequences of the contract.

Intoxication: If a person is so intoxicated from drugs or alcohol that they cannot understand the nature of the contract being entered into.

Question 7

Intention

Answer 7

willingness of the parties to accept the legal consequences of their agreement. Do we all intend to legally formalize these obligations?

Question 8

Legality

Answer 8

refers to the requirement that the terms and purpose of a contract must not violate any laws or public policy. Is this kind of agreement legal?

Question 9

What is exclusion clause?

Answer 9

A clause that excludes or restricts liability. Therefore, it is a clause under which a party seeks to exclude or limit its liability for non-performance of the contract

Question 10

When do exclusion clauses form part of a contract?

Answer 10

when they are incorporated before or at the time of agreement, with adequate notice given, clearly worded, and legally permissible.

Question 11

What is a “mistake” in a contract?

Answer 11

An erroneous belief held by one or both parties at the time of the contract formation about a fact that is significant to the agreement. Can be Unilateral or Mutual

Question 12

Types of misrepresentation?

Answer 12

Innocent: Saying something without knowing if it’s true or not just to convince.
Negligent: Saying something carelessly that you have the responsibility to check out.
Fraudulent: Purposely saying something that is incorrect.

Question 13

What happens when you accept a contract by email?

Answer 13

Contract acceptance occurs when the person who made the offer receives the email. The law will apply where the person who made the offer received the acceptance.

Question 14

What is duress and Undue Influence?

Answer 14

Are concepts in contract law that refer to situations where a person enters into a contract as a result of pressure or improper influence from another party, which can affect the validity of the contract.

Question 15

What is Unconscionability?

Answer 15

Refers to a defense that can be used when the terms of a contract or the circumstances under which it was made are so unfair to one party that the contract is oppressive or shocks the conscience of the court

Question 16

What is frustration?

Answer 16

When something happens that neither party can control that prevents one or both parties from fulfilling their obligations under the contract.

Question 17

What is performance?

Answer 17

refers to the execution of the duties and obligations that each party has agreed to under the terms of the contract. It is the act of doing what is required by the contract.

Question 18

What is specific performance?

Answer 18

Is a remedy in contract law that orders a party to fulfill their actual obligations under a contract, rather than simply paying damages for failing to fulfill the contract. This remedy is typically used when monetary damages are inadequate to compensate the non-breaching party, or when the subject matter of the contract is unique and cannot easily be obtained elsewhere.

Question 19

What is the primary purpose of courts while dealing with contracts?

Answer 19

To find a way forward. To help parties to negotiate. They also look for fairness.

Question 20

What is important while making a contract?

Answer 20

To be very specific and anticipate as many situations and problems as you can.

Question 21

What is the “language of the contract”?

Answer 21

Refers to the words and terms used within the document to express the agreement between the parties. It serves as the basis for understanding the rights, obligations, and expectations involved.

Question 22

What are insurance contracts?

Answer 22

legally binding agreements between an insurance company (the insurer) and an individual or entity (the insured or policyholder), where the insurer agrees to compensate the insured for specific potential future losses, damage, illness, or death in return for payment of a premium.

Question 23

What is an employment contract?

Answer 23

is a legally binding agreement between an employer and an employee that outlines the terms and conditions of employment, including job responsibilities, salary, benefits, and work hours.

Question 24

mandatory arbitration clause?

Answer 24

is a term in a contract that obligates parties to settle disputes through arbitration instead of court litigation.

Question 25

What is a contract?

Answer 25

A contract is a voluntary exchange of promises or commitments that are legally enforceable in our courts

Question 26

What is an implied contract?

Answer 26

An implied contract is one where the terms and understanding between parties are inferred from their conduct, rather than explicitly stated in written or verbal form.

Question 27

What is the balancing act?

Answer 27

The balancing act in contract law involves fairly addressing the interests of both parties while ensuring that the agreement is legally binding and enforceable.

Question 28

What is legalese

Answer 28

Language of lawyers

Question 29

In which language should contracts be written?

Answer 29

in plain language, avoid technical language “legalese”