Part 1: Contracts

Question 1

What is a contract?

Answer 1

A binding document that requires the agreement of wills of two different parties or more

Question 2

For a contract to exist there must be…

Answer 2

Intention to enter a contract

Question 3

A contract, by law is… (2)

Answer 3

legally binding, regulated and protected by law.
Once concluded, must be complied by law by both parties.

Question 4

The non compliance of a contract can be either…

Answer 4

A normal breach
a material breach

Question 5

Normal breach

Answer 5

When the other party’s obligations can’t be meet, but they are still interested in getting what was contracted.

Question 6

material breach

Answer 6

A serious breach to the point that the other party is no longer willing to continue the contract (i.e.)

Question 7

A contract can only be broken unilaterally if its…

Answer 7

due to a material breach or a force majeure situation

Question 8

force majeure

Answer 8

a unforeseen, unexpected situation or catastrophe that doesn’t allow you to comply with the contract’s liability and obligations

Question 9

Typical contracts (and examples)

Answer 9

contracts provided and regulated by the law such as purchase and sale, donation, partnerships, etc…

Question 10

Atypical contracts

Answer 10

contracts in which in addition of not having nomen juris (iuris), they do not have specific legal regulations

Question 11

Atypical contracts are concluded under the principle of…

Answer 11

principle of contractual freedom

Question 12

nomen juris (iuris)

Answer 12

a proper name assigned by the law
and/or
a legal name/designation

Question 13

principle of contractual freedom

Answer 13

The ability of two parties to create a contract without interference of the government or state, which is legally binding.

Question 14

mixed contracts

Answer 14

those in which the rules of two or more businesses fully or partially regulated by the law are incorporated in the same contract.

Question 15

Within mixed contracts, you can distinguish between

Answer 15

simple joining of contracts (junction)
coalition of contracts

Question 16

Simple junction of contracts

Answer 16

The link between contracts is accidental

Question 17

coalition of contracts

Answer 17

The link between contracts are due to a dependency on one another, usually due to a contract being a condition of the other

Question 18

example of a coalition of contracts

Answer 18

In buying a house, you are also acquiring furniture, i.e. the furniture is also being sold alongside the house.

Question 19

What are the limitations on the freedom to enter a contract?

Answer 19

Both parties must agree or its void.
When prevented by law from contracting certain people.
When you are dependent on someone else’s consent.

Question 20

What are the limitations on the freedom to enter a contract when prevented by law?

Answer 20

Providing alcohol to minors, as it’s an infringement on the law of prohibiting alcohol being purchased by minors.

Question 21

What are the limitations on the freedom to enter a contract when prevented by someone else’s consent?

Answer 21

When selling a house in which both spouses own (shared asset), you need the consent of the other spouse.

Question 22

What is the freedom of form principle?

Answer 22

The contract is valid as long as both parties agree, without needing any special form (written, recorded).

Question 23

What are examples of the freedom of form principle?

Answer 23

Examples: (i) the contracts between tourist resorts and their guests are not subject to a written form;
(ii) the total and definitive transfer of the patrimonial content of author’s rights can only be executed by public deed;
(iii) the lease of real estate is subject to the
written form.

Question 24

Parties are able to enjoy the principle of stipulation, what does this mean?

Answer 24

the freedom to stipulate (demand, specify) the contents of the contract, including in it the clauses they deem most appropriate
for the regulation of their interests

Question 25

What is the principle of good faith?

Answer 25

This exists for the life of a contract, stating that anyone establishing a contract will be obligated to follow through with the contract in good faith.

Question 26

What is the principle of the binding force of contracts?

Answer 26

A contract can only be modified or terminated by mutual consent of both contracting parties (unless death or force majeure).

Question 27

Which situations can there be a forced legal obligation to enter into a contract?

Answer 27

• Two parties who entered into a promissory contract (a promise contract), then obliged to enter.
• A utility company cannot refuse supply of service to someone who meets the legal conditions to be able to access the service.

Question 28

What are other limitations on the freedom to establish a contract based on if it’s doable or not?

Answer 28

a legal transaction whose object is physically or legally impossible, contrary to the
law or indeterminable” is void.

Question 29

What is the principle of the binding force of contracts?

Answer 29

Article 406(1) of the civil code says contracts must be followed as agreed. They can only be changed or terminated if both parties agree or if the law allows it.

Question 30

What are the three sub principles of the principle of biding force of contracts?

Answer 30

• Principle of exact and punctual compliance (contract must be complied)
• Principle of intangibility of the content (contract cannot be modified)
• Principle of irrevocability (can only be terminated by both parties)