Midterm (contracts)

Question 1

Definition of a Contract

Answer 1

A contract is a legally enforceable promise between two parties. Generally, contracts are exchange promises between the parties to take (or not take) certain actions.

Question 2

Offer & Acceptance

Answer 2

The agreement between the parties is the core of a contract. The agreement is a matching of an offer and an acceptance. To form a contract, one party (the offeror) expresses an offer to contract to another party (the offeree), and the offeree must indicate that they accept the offer.

Question 3

Persons 2 types

Answer 3

A natural person & Juristic persons

Question 4

A natural person

Answer 4

A natural person is the personality of a human that begins at birth and ends with death.
Those who reach the age of majority (18 years of age), and enjoy their mental faculties are entitled to the full exercise of their civil rights.

Question 5

Juristic persons

Answer 5

Juristic persons are the state; public institutions; religious sects; religious dedications (waqfs); companies that enjoy a juristic personality by law.
Each juristic person must have an appointed representative.

Juristic persons enjoy all of the rights enjoyed by natural persons except those that are inherent to natural persons.
Juristic persons can engage in business transactions, can engage in litigation, and have a domicile.
A juristic person is considered domiciled in the place where its head office is located.

Question 6

Things, Property, and
Rights

Answer 6

The Iraqi Civil Code states that everything is subject to ownership except those things which are by their nature or by law excluded from ownership.

Question 7

Property

Answer 7

Property is defined as anything having a material value. The Iraqi Civil Code divides property into several types: movable and immovable; tangible and intangible; public and private.

Question 8

Requirements for a Valid Contract (3 Elements)

Answer 8

A contract consists of three elements:
1. Mutual consent of the parties,
2. A valid object (contract’s subject matter), and
3. A lawful cause

Question 9

Void Contracts

Answer 9

Even if parties have consented to the contract and possess sufficient capacity to legally do so, their consent may be voided by defects of the will (defect to contract formation).
In Iraqi civil law, consent to the contract can be nullified by
mistake, fraud, or duress.

Question 10

Basics of certain types of contracts 1) The Contract of Sale

Answer 10

It is the exchange of one property for another property.

Types:
General Sale: It is the sale of commodity against currency.
Exchange: It is the sale of currency against currency.
Barter: It is the sale of a commodity against another commodity.

Question 11

Basics of certain types of contracts 2.Lease Contract

Answer 11

The Iraqi Civil Code defines a lease as ―the alienation of a definite advantage in return for a defined consideration for a certain specified period by which the lessor will be bound to enable the lessee to enjoy the leased [property].

Under Iraqi law, a lessor is ―bound to repair any defect in the leased property that has resulted in interference with its intended use.
If the lessor fails in this regard, the lessee may either
rescind the contract or, with a court‘s permission, carry out the repairs and claim the expenses from the lessor.

Question 12

Basics of certain types of contracts
3. Contract for work “muqawala”

Answer 12

It is a contract where one party undertakes to manufacture a thing or render work (offer labor) in consideration of a wage to be paid by the other party.
Types:
The contractor is a wage-earner: the contractor provides labor and the employer will supply the material which is to be used by the contractor in the manufacture.

A manufacturing contract: the contractor provides the labor and the materials.

Question 13

Obligations of the Contractor

Answer 13

1) the contractor is responsible for his good quality work.
2) The contractor must safe keep the materials if provided by his
employer.
3) The employer may rescind the contract if the contractor is late in commencing the work or is late in completing it.

Question 14

The Obligations of the Employer

Answer 14

1) The employer must inspect the work and take delivery as soon as the contractor has completed the work.
2) The employer must pay as soon as the work is delivered to him.

Question 15

Interest

Answer 15

Interest is the amount of money a lender or financial institution receives for lending out money.

Question 16

Breach of a Contract

Answer 16

A party who does not fulfill its promise is said to have breached the contract. When a party breaches a contract, s/he is required to compensate the other party to the contract for the harm caused the breach.
The General rule is that the breaching party will be required to perform on the contract as they originally promised. This is called specific performance.
If fulfilling their end of the contract is not possible, the court may require the breaching party to compensate the non-breaching party with money damages.

Question 17

Assessing damages (Compensatory Damages)

Answer 17

The court assesses damages with the intent of compensating the damaged party for the losses they have sustained as a result of the breach.
In other words, the court should award the damaged party the benefits s/he should have received had the promise been fulfilled.

Question 18

Termination (Dissolution) of a Contract

Answer 18

Contracts must show time (Start-End), otherwise it is voidable.
- If one person does not perform the promise under the contract first you give Notice ( that the job is not done).Judges do not always terminate contracts, especially when it is trivial (small) damage.

-Contracts can be terminated under “good cause” where both parties agree to terminate the contract.

-Whereas there is no need to “shake hands” if the duration of the contract is finished as it is automatically terminated.