Part 1 of Chapter 4 Flashcards
What are contracts
An agreement of wills
If someone agrees but has additions, limitations or other modifications what happens?
Then the contract is not accepted, acceptance with modifications constitutes a rejection of the proposal unless the modification itself constitutes a new proposal.
When is a contract concluded/agreed upon?
When the parties reach an agreement in relation to all the clauses that they consider necessary for the formation of the agreement. (when the opposing interests of each of the parties are reconciled).
What constitutes a contract
- An agreement of wills of two or more parties and as such is a bilateral or plurilateral legal transaction
- There must be intention to create a legal relation
- An agreement of wills aimed at creating, modifying or terminating legal relations.
- Binding agreement, regulated and protected by law. Once concluded, the parties are bound to comply with it, under the agreed terms.
Fundamental Principles of Contract law
- Principle of Contractual freedom
- Freedom of Form Principle
- Principle of good faith
- Principle of the Binding force of contracts (Leads to three sub-principles)
4 (a): Principle of exact and punctual compliance
4 (b): Principle of intangibility of the content
4 (c). Principle of irrevocability
Explain Principle of Contractual Freedom
Consequence of the principle of private autonomy.
1. Parties enjoy freedom to enter into a contract (to decide whether or not to enter a contract and to choose the other party
2. Freedom to select the type of contract
3. Freedom of stipulation
4. Freedom to establish the content of the contract (combo of 2 and 3)
What are the limitations on the freedom to enter into a contract
- There are cases in which one or both parties are subject to a legal obligation or duty to contract
- Others where they are prevented from contracting with certain people
- And still others where they are dependent upon someone’s consent.
What are the limitations o the freedom to establish the content of the contract
A legal transaction whose object is physically or legally impossible, contrary to the law or indeterminable is void. It is also void if a legal business is contrary to public order, or offensive to good customs.
Are there mandatory legal provisions?
Yes, that are imperative and cannot be overridden by the will of the parties.
What is the Freedom of Form principle
According to the principle, unless otherwise stated, the perfection of the contract depends only on the agreement of wills between the parties, without the need to adopt a special form.
What is the Principle of good faith?
Present for the entire life of a contract
Determines that anyone who negotiates with anther person with a view to concluding a contract is obliged, both in the preliminary and in the formation of it, to proceed in accordance with the rules of good faith.
If either party fails to comply due to intent or negligence, said party will be held liable to the damages of the other.
Both in fulfilment of an obligation, as well as in the exercise of the corresponding right, the parties are obliged to proceed in good faith.
What is the Principle of the binding force of contracts
Contracts must be punctually performed, and can only be modified or terminated by mutual consent of the contracting parties or in cases allowed by law
What are the three sub-principles of the Principle of binding force of contracts?
- Principle of exact and punctual compliance
- Principle of intangibility of the content
- Principle of irrevocability
What is the Principle of exact and punctual compliance
Means that the contract must be complied with in its entirety, point by point in all its clauses, (Obligations contained therein must be fulfilled).
What is the Principle of intangibility of the content
Except in cases provided by law, once a contract is concluded, its content is intangible, and can only be modified with the agreement of both parties.
