LAW OF CONTRACTS

EVERY AGREEMENT OR PROMISE ENFORCEABLE AT LAW IS A CONTRACT.

KINDS OF CONTRACTS
   

    

VALID CONTRACT VOID CONTRACT ILLEGAL CONTRACT UNENFORCEABLE CONTRACT EXPRESS CONTRACT IMPLIED CONTRACT QUASI CONTRACT EXECUTED CONTRACT EXECUTORY CONTRACT

ESSENTIALS OF VALID CONTRACT



  

PROPOSAL AND ACCEPTANCE CAPACITY TO CONTRACT FREE CONSENT CONSIDERATION LEGALITY OF OBJECTS

PROPOSAL OR OFFER
PROPOSAL IS THE SIGNIFICATION BY ONE PERSON TO ANOTHER OF HIS WILLINGNESS TO DO OR TO ABSTAIN FROM DOING ANYTHING, WITH A VIEW TO OBTAINING THE ASSENT OF THAT OTHER TO SUCH ACT OR ABSTINENCE.

TYPES OF OFFER
      

EXPRESS OFFER IMPLIED OFFER SPECIFIC OFFER GENERAL OFFER STANDING OFFER CROSS OFFERS COUNTER OFFER

ACCEPTANCE
WHEN THE PERSON TO WHOM THE PROPOSAL IS MADE SIGNIFIES HIS ASSENT THERETO, THE PROPOSAL IS SAID TO BE ACCEPTED.

OFFER + ACCEPTANCE = CONTRACT

ESSENTIALS OF VALID ACCEPTANCE

       

ABSOLUTE AND UNQUALIFIED COMMUNICATED TO OFFEROR IN PRESCRIBED MANNER WITHIN TIME LIMIT CANNOT PRECEDE OFFER INTENTION TO FULFIL PROMISES CANNOT BE IMPLIED FROM SILENCE MUST BE BY OFFEREE

CAPACITY TO CONTRACT
FOLLOWING PERSONS ARE INCOMPETENT TO CONTRACT: MINORS PERSONS OF UNSOUND MIND PERSONS DISQUALIFIED BY ANY LAW TO WHICH THEY ARE SUBJECT

MINOR S CONTRACTS
  

       

MINOR S CONTRACTS ARE VOID MINOR CAN BE BENEFICIARY HIS AGREEMENTS CANNOT BE RATIFIED BY HIM LATER. NOT LIABLE TO RETURN BENEFIT CAN ALWAYS PLEAD MINORITY CANNOT BE ASKED FOR PERFORMANCE CANNOT BE PARTNER CANNOT BE INSOLVENT HIS ESTATE IS LIABLE FOR NECESSITIES PROVIDED CAN BE AGENT PARENTS NOT LIABLE

CASE EXAMPLE Bojczuk v. Gregorcewicz [1961] SASR 128

Facts: A minor living in Poland was lent some money by a relative who paid for her passage to emigrate from Poland to Australia. The minor subsequently reneged on her promise and the plaintiff sued to recover the money that had been lent. Decision: The court held that migrating to Australia and the accompanying benefits did not amount to a conferral of the necessaries of life upon her. The minor did not have to repay the money that was lent. The court said that the minor did not come to Australia for the purpose of providing herself with a means of support, as she had a satisfactory job in Poland.

PERSON OF UNSOUND MIND

A PERSON IS SAID TO BE OF UNSOUND MIND FOR THE PURPOSE OF MAKING A CONTRACT , IF AT THE TIME HE MAKES IT, HE IS INCAPABLE OF UNDERSTANDING IT, AND OF FORMING A RATIONAL JUDGEMENT AS TO ITS EFFECT UPON HIS INTEREST.

TWO CONDITIONS
A person who is of unsound mind, or intoxicated because of alcohol or other drugs, will be bound by a contract unless two matters can be proved: 1. that the impaired person did not understand what they were doing because of the condition they were in 2. that the person with whom the impaired person was contracting knew of the impaired persons condition.

CASE EXAMPLE York Glass Co. Ltd v. Jubb [1925] All ER Rep 285
Facts: Jubb contracted to purchase the plaintiffs company business. On the date of contracting, he was technically insane and shortly thereafter was placed in a lunatic asylum. The receiver of his estate, who was appointed under a lunacy statute, repudiated the contract. The plaintiff company sued for damages, alleging the repudiation was wrongful. Decision: The court held that a contract entered by someone of unsound mind is valid unless the impaired person can show that the other party was aware, at the time of contracting, that the impaired person was so insane that he was incapable of understanding what he was doing. In this case, there was no evidence to show that the plaintiff company knew or suspected that Jubb had been insane at the point of contracting. The contract was valid and Jubbs estate had to pay damages for not performing the contract.

PERSONS DISQUALIFIED BY LAW

 

 

ALIEN ENEMY FOREIGN SOVEREIGN INSOLVENT CONVICT

FREE CONSENT
CONSENT IS SAID TO BE FREE WHEN IT IS NOT CAUSED BY: COERCION UNDUE INFLUENCE FRAUD MISREPRESENTATION MISTAKE

COERCION
COERCION IS THE COMMITTING, OR THREATENING TO COMMIT, ANY ACT FORBIDDEN BY PAKISTAN PENAL CODE, OR THE UNLAWFUL DETAINING OR THREATENING TO DETAIN, ANY PROPERTY TO THE PREJUDICE OF ANY PERSON WHATEVER, WITH THE INTENTION OF CAUSING ANY PERSON TO ENTER INTO AN AGREEMENT. BURDEN OF PROOF LIES OF THE COERCED PERSON!

UNDUE INFLUENCE
UNDUE INFLUENCE EXISTS WHERE THE RELATIONS SUBSISTING BETWEEN THE PARTIES ARE SUCH THAT ONE OF THE PARTIES IS IN A POSITION TO DOMINATE THE WILL OF THE OTHER AND USES THAT POSITION TO OBTAIN UNFAIR ADVANTAGE OVER THE OTHER.

PRESUMPTIONS OF UNDUE INNFLUENCE

        

MASTER AND SERVANT DOCTOR AND PATIENT FATHER AND SON PARENT AND CHILD LAWYER AND CLIENT TRUSTEE AND BENEFICIARY FIANCER AND FIANCEE GUARDIAN AND WARDS RELIGIOUS ADVISOR AND DISCIPLE

COERCION vs. UNDUE INFLUENCE

      

CONSENT CHARACTER INTENTION AND INFLUENCE OFFENCE EXERCISED AGAINST RELATIONSHIP BENEFIT OBTAINED

CONTRACT OF UBERRIMAE FIDEI

A CONTRACT OF UBERRIMAE FIDEI IS THAT IN WHICH IT IS THE DUTY OF ONE OF THE PARTIES TO DISCLOSE ALL THE FACTS WITHIN HIS KNOWLEDGE, TO THE OTHER, AND SILENCE IS DEEMED TO BE EQUIVALENT TO SPEECH e.g. Contract of insurance Contract of purchase of shares Contract of sale of land Contract of family arrangement Surety ship Fiduciary relationships

Fiduciary


An individual, corporation or association holding assets for another party , often with the legal authority and duty to make decisions regarding financial matters on behalf of the other party.

MISREPRESENTATION
MISREPRESENTATION IS A FALSE STATEMENT WHICH THE PERSON MAKING IT HONESTLY BELIEVED IT TO BE TRUE, OR WHICH HE DOES NOT KNOW TO BE FALSE.

FRAUD
FRAUD MEANS ALL ACTS COMMITTED BY A PARTY TO A CONTRACT WITH INTENT TO DECEIVE ANOTHER PARTY TO INDUCE HIM/HER TO ENTER INTO THE CONTRACT.