BASIC PRINCIPLES OF CONTRACT LAW

REALIZED BY:
CHAHOUBE WAFAA
 EL MAJDOUB HAJAR
CHAJARI ZINEB
 PLAN
I. FORMATION OF A CONTRACT
II.THE END OF A CONTRACT
III.universal principles that govern the
contract law
 :INTRODUCTION

Contracts are in every aspect of our everyday lives. When you rent a home, accepted a
job offer or signed up for a mobile phone.
These activities are governed by contracts.
And there are several key aspects of every contract.
-Beginning with the intent to make one, an offer and consideration for both sides.

-Agreement on the specific elements of a contract leads to acceptance at which point

the contract is legally binding to both parties.
-Of course, the parties must have made truthful representations in the course of the
negotiations.
-
 In contract negotiations, once you come to terms with the other party
you can ratify the agreement.
-During this negotiation the parties may make certain statements
without prejudice.
-The conditions and warranties of a contract are laid out in carefully
written clauses.
Legal responsibility, or liability, is spelled out very clearly in a contract.
Parties may be joint and severally liable or they may enjoy limited
liability.
-When two parties under contract cannot agree they may try to settle
their dispute through a process of arbitration, if this doesn’t work one
party may attempt to sue the other in court hoping to be awarded
damages in the case of a breach of contract
: FORMATION OF A CONTRACT
Is an agreement giving rise to obligations which are
enforced or recognized by law between people or businesses
Whenever we make a contract, we are creating a legal
.relationship
Ex: Under John’s employment contract, he gets 1
.month of vacation every year
:INTENT

Having the intent to make a contract means that you

. actually want to make one
.Without intent on both sides, there can be no contract
Ex: While Bard wanted to make some sort of deal amine
.had no intent
:OFFER

When you propose a possible contract to a person or

business you are making an offer. That offer maybe accepted,
rejected, or amended and sent back as a counteroffer.
Ex: The company’s lawyers sent the offer to the
competitors legal team.
:ACCEPTANCE

Acceptance happens when both sides agree on a contract.

Once the offer on the contract is formally accepted the
agreement becomes legal.
Ex: acceptance of a contract depends on certain facts
being verified.
:LEGALLY BINDING

If a contract is legally binding it means it is valid under the

law.
The parties are bounded to the contract and must fulfill their
obligations.
Ex: The contract was not legally binding because it
wasn’t signed by both parties.
 :CONSIDERATION

Every contract must include something of value for both

sides however small, this benefit or item of value is called
consideration.
Ex: John felt that the deal didn’t include enough
consideration for his party.
:PARTY

The parties in a contract are those who are agreeing to do

something.
Each party may be a person, a group of people or business
or another type of organization.
Ex: Because the two parties couldn’t agree on costs
they failed to make a deal.
 :REPRESENTATIONS

Any time you make a statement of fact or negotiation in a

contract you are making representation.
Ex: The judge decided that coca cola’s
representations were truthful and accurate.
: TERMS

The terms of a contract are the detailed points that the

parties are agreeing to. When the parties come to terms, they
are reaching agreement on all of these detailed points.
Ex: After a lengthy negotiation process, we finally
come to terms on a deal.
 :RATIFY AN AGREEMENT

When the parties agree to a contract, they must ratify the

agreement.
This normally means officially accepting the contract by
signing a paper version.
Ex: The signature of both parties are required do you
ratify the agreement.
:WITHOUT PREJUDICE

Sometimes parties will state things that they do not want

to be part of the agreement.
We can say that these statements are made without
prejudice, and they cannot be used as evidence (prevue) in
legal cases.
Ex: The statement was made without prejudice, so it
could not be used in court.
 :CONDITIONS

The most important terms of a contract are called

.conditions
.If a condition is not met the contract is broken or breached
Ex: The lawyer worded the conditions of the contract
.very carefully
 :WARRANTY

A warranty is a type of guarantee that a manufacturer or

similar party makes regarding the condition of its product. It
also refers to the terms and situations in which repairs or
exchanges will be made in the event that the product does
not function as originally described or intended.
Ex: Breaking a warranty does not normally mean that
.the contract has been breached
:CLAUSES
The terms of the contract are written in sections called
clauses .
There are certain types of clauses, such as exemptions
clauses and non-compete clauses.
Ex: I read each and every clauses of my employment
contract very carefully.
 :LIABILITY

Liability refers to legal responsibility.

If a party breaks a contract or does not fulfill its duties,
that party is liable.
Ex: The judge decided liability rested with the
supplier because they failed to deliver.
JOINT AND SEVERALLY LIABLE

If more than one person or business enters a contract as

partners, they may be joint and severally liable.
This means that each person on business is individually
responsible for the entire contract.
Ex: Because the contractors were joint and severally
liable, they all had to pay.
:LIMITED LIABILITY

If a party in a contract is a limited company, then that

company’s owners enjoy limited liability.
Ex: The company enjoyed limited liability, so it’s
director’s assets were protected.
: TO SETTLE A DISPUTE

When contracted parties can’t agree, they have a dispute.

Finding a solution to their disagreement is referred to as
settling the dispute which they may do in or out of court.
Ex: It took the U.S and Canada years to settle their
dispute over tobacco taxes.
 : ARBITRATION

Contracted parties that have a disagreement will usually

try to reach solution out of court through arbitration.
Ex: Wanting to avoid a costly legal battle the two
companies agreed to arbitration.
 :TO AWARD DAMAGES

If the contracted parties can’t settle their dispute through

arbitration they may go to court.
In this case, the judge may award damages to the party that
is able to prove their claim.
Ex: The judge awarded damages to the complainant
after a lengthy court case.
 : THE END OF CONTRACT
A contract is a legal document that binds at least two parties to one another
and requires them to meet certain obligations detailed in the contract. In some
instances, contract termination can occur that will make the contract void of legal
.binding. Only the parties involved in the agreement may terminate a contract
There are 4 main ways contracts terminate or can be terminated (there is a
:difference)
EXPIRATION:
This refers to a contract which comes to an end in
accordance with its terms, either because it has a fixed expiry
date or because there is a right to terminate contained in the
contract (a contractual right to terminate is distinct
from a Moroccan law right to terminate for breach, which is
discussed below).
BREACH
When a contract is intentionally not honored by one party, it is called a breach of
contract and is grounds for contract termination. A breach of contract may exist
because one party failed to meet his obligations at all or did not meet his obligations
fully.
For example, if you purchased a product that did not arrive until a day after the
agreed upon delivery date, that is an immaterial breach of contract. However, if your
order did not come until two weeks after the delivery date and it affected your
business, then that is a material breach of contract.
Generally, with a material breach of contract, the injured party has the right to seek
monetary damages for his losses as well as cancel the agreement.
:ANTICIPATORY BREACH
An anticipatory breach occurs when, before performance
is due, a party either repudiates the contract or disables
himself from performing it.
:MISREPRESENTATION
A misrepresentation is a false statement of fact made by one party to
another, which, whilst not a term of the contract, induces the other party to
enter into the contract.
An actionable misrepresentation must be a false statement of fact, not of opinion or
future intention or law.
Silence does not normally amount to misrepresentation. However, the represent
or must not misleadingly tell only part of the truth. Thus, a statement that does not
present the whole truth may be a misrepresentation. Where a statement was true when
it was made but due to a change of circumstances becomes false, there is a duty to
disclose the change.
MISTAKE
A contract may be void or voidable if mistake has occurred. If a
contract is void, then it is so 'abs initio' (from the beginning), as if the
contract was never made. In such cases, no obligations will arise
under it.
Alternatively, if the contract is voidable, the contract will have been
valid from the start and obligations may arise under it despite the
mistake.
:RESCISSION
If a contract is made undone, this is called rescission. All parties that were
originally part of the contract can, under rescission, return to their original state.
If one signee of the contract happens to make a comprehensible mistake or acts
unlawfully, the contract is terminated, which is referred to as rescission.
As an example, if you purchase a house but after having signed the contract, you
find out that the landlord has clearly withheld important information about the
condition of the pool, you can potentially rescind from the contract.
Rescission is also used in cases of an underage or older adult who is legally not
allowed to or capable of signing the contract.
:IMPOSSIBILITY OF PERFORMANCE

A contract typically requires one or more parties to do something, which is

called performance.
For example, a company may hire and sign a contract to have a public speaker
talk at a company event. Once the public speaker fulfills his duties agreed upon
in the contract, it is called performance. If for some reason it is impossible for
the public speaker to fulfill his duties, it is called impossibility of performance or
sometimes "frustration.“
For example, if the speaker were seriously injured and no one could replace him,
that would be impossibility of performance. The company has the right to
terminate the contract in this scenario.
:TERMINATION BY PRIOR AGREEMENT

You may terminate a contract if you and the other party have a
prior written agreement that calls for a contract termination because
.of a specific reason
.The usual name for this type of provision is a break clause
The agreement must give the details of what qualifies as a reason
for contract termination. It should also state what actions need to take
place for one of the parties to terminate the contract. In most cases,
one party must submit a written notice to the other party to terminate
.the contract
: COMPLETION OF THE CONTRACT

A contract is essentially terminated once the obligations

outlined in the contract are completed.
Parties should keep documentation showing that they
fulfilled their contract duties.
Documentation is helpful if the other party tries to later
dispute the fulfillment of your contract obligations. A court
of law will require proof of contract fulfillment if a dispute
occurs.
NULLITY:
la nullité
Nullity is the nuclear sanction in contract law. The judge will try to rewind the contract: the
parties need to be put in the position that they would have been in without the contract.
The are two types of nullity: absolute and relative.
Absolute nullity:
Absolute nullity is that specific type of nullity which sanctions the disrespect, when concluding a
civil legal act, of a legal provision which protects a general Interest
Relative nullity:
When a contract concluded in violation of a legal provision aimed at the protection of a private
interest is annullable.
UNIVERSAL PRINCIPLES:
There are 4 universal principles that govern the contract law:
Freedom of contract
The binding force of contract
Party autonomy
Good faith
FREEDOM OF CONTRACT
la liberté des parties

Freedom of contract is the process in which individuals

and groups form contracts without government restrictions,
it is the solid foundation of « laissez-faire » economics and it
is a cornerstone of free-market libertarianism. The
proponents of the libertarianism concept believe that through
« freedom of contract » individuals possess a general
freedom to choose with whom to contract, whether to
contract or not and on which terms to contract.
This principle has been recognized as general principal of
civil law by the European court of justice, he has been seen
as protected by article 16 of the EU charter of fundamental
and states that : « the freedom to conduct a business in
accordance with community law and national laws and
practices is recognized ».
 THE BINDING FORCE OF CONTRACT:
la force obligatoire du contrat

According to article 230 to the obligations and

contracts code: « validly formed contractual obligations
take the place of law for those who formed them and they
can only be revoked by their mutual consent or in the cases
provided for by law ».
PARTY AUTONOMY :
l’autonomie des parties

This principal means power given to the parties to choose

the law that will govern the contract, party autonomy
enhances the predictability and the legal certainty within the
parties and also gives recognition to the parties may be in
the best position to determine the set of legal terms that will
be most suitable for their contract.
It also means that the parties should be free to select the
applicable procedures for arbitration between themselves.
GOOD FAITH
la bonne foie

The article 231 to the obligations and contracts code

provides that : « all commitments must be carried out in
good faith and obliges not only what is explicitly expressed
therein but also all the consequences which the law, the
practice or the equity bring to the obligation according to its
» nature