LEC学习材料-合同法

合同法CONTRACTS

In law, a contract is a binding legal agreement that is enforceable in a court of law or by binding arbitration. That is to say, a contract is an exchange of promises with a specific remedy for breach. Agreement is said to be reached when an offer capable of immediate acceptance is met with a "mirror image" acceptance (i.e., an unqualified acceptance). The parties must have the necessary capacity to contract and the contract must not be either trifling, indeterminate, impossible, or illegal. Breach of contract is recognized by the law and remedies can be provided.

As long as the good or service provided is legal, any oral agreement between two parties can constitute a binding legal contract. The practical limitation to this, however, is that only parties to a written agreement have material evidence (the written contract itself) to prove the actual terms uttered at the time the agreement was struck. In daily life, most contracts can be and are made orally, such as purchasing a book or a sandwich. Sometimes written contracts are required by either the parties, or by statutory law within various jurisdiction for certain types of agreement, for example when buying a house or land.

Contract formation

In common-law systems, the five key requirements for the creation of a contract are:

1. offer and acceptance (agreement)

2. consideration

3. an intention to create legal relations

4. legal capacity

5. formalities

Offer and acceptance analysis is a traditional approach in contract law used to determine whether an agreement exists between two parties. As a contract is an agreement, an offer is an indication by one person (the "offeror") to another (the "offeree") of the offeror's willingness to enter into a contract on certain terms without further negotiations. A contract is said to come into existence when acceptance of an offer (agreement to the terms in it) has been communicated to the offeror by the offeree.

Treitel defines an offer as "an expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is

addressed", the "offeree". An offer is a statement of the terms on which the offeror is willing to be bound.

The "expression" referred to in the definition may take different forms, such as a letter, newspaper, fax, email and even conduct, as long as it communicates the basis on which the offeror is prepared to contract.

Whether two parties have an agreement or a valid offer is an issue which is determined by the court using the Objective test (Smith v. Hughes). Therefore the "intention" referred to in the definition is objectively judged by the courts. In the English case of Smith v. Hughes the court emphasised that the important thing is not a party's real intentions but how a reasonable person would view the situation. This is due mainly to common sense as each party would not wish to breach his side of the contract if it would make him or her culpable to damages, it would especially be contrary to the principle of certainty and clarity in commercial contract and the topic of mistake and how it affects the contract. As a minimum requirement the conditions for an offer should include at least the following 4 conditions: Delivery date, price, terms of payment that includes the date of payment and detail description of the item on offer including a fair description of the condition or type of

service. Without one of the minimum requirements of condition an offer of sale is not seen as a legal offer but rather seen as an advertisement.

Acceptance is a final and unqualified expression of assent to the terms of an offer. It is no defense to an action based on a contract for the defendant to claim that he had not intended to be bound by the agreement, if his conduct demonstrated that he had.

Rules of acceptance

There are several rules dealing with the communication of acceptance:

?The acceptance must be communicated: see Powell v Lee (1908) Prior to acceptance, an offer may be withdrawn.

?An exception exists in the case of unilateral contracts, in which the offeror makes an offer to the world which can be accepted by some act. A classic instance of this is the case of

Carlill v. Carbolic Smoke Ball Co. [1892] 2 Q.B. 484 in which an offer was made to pay ￡100 to anyone who having bought

the offeror's product and used it in accordance with the instructions nonetheless contracted influenza. The plaintiff did so and the court ordered payment of the ￡100. Her

actions accepted the offer - there was no need to communicate acceptance. Typical cases of unilateral offers are advertisements of rewards (e.g., for the return of a lost dog).

?An offer can only be accepted by the offeree, that is, the person to whom the offer is made.

?An offeree is not usually bound if another person accepts the offer on his behalf without his authorization, the exceptions to which are found in the law of agency, where an agent may have apparent or ostensible authority, or the usual authority of an agent in the particular market, even if the principal did not realize what the extent of this authority was, and someone on whose behalf an offer has been purportedly accepted it may also ratify the contract within a reasonable time, binding both parties.

?It may be implied from the construction of the contract that the offeror has dispensed with the requirement of communication of acceptance (called waiver of communication - which is generally implied in unilateral contracts): see also Re Selectmove Ltd [1994] BCC 349.

?If the offer specifies a method of acceptance (such as by post or fax), acceptance must be by a method that is no less

effective from the offeror's point of view than the method specified. The exact method prescribed may have to be used in some cases but probably only where the offeror has used very explicit words such as "by registered post, and by that method only": see Yates Building Co. Ltd v. R.J. Pulleyn & Sons (York) Ltd (1975) 119 Sol. Jo. 370.

?Silence cannot be construed as acceptance: see Felthouse v.

Bindley (1862) 142 ER 1037.

?However, acceptance may be inferred from conduct.

Vitiating Factors

There are the factors affecting the validity of an otherwise effective contract. They include mistakes, misrepresentation, duress, undue influence and illegality.

Discharge

Once it is determined that a party is under an immediate duty to perform, the duty to perform must be discharged. A contract may be discharged in one of the following ways:

·By performance

·By tender of performance

·By frustration

·By operation of law

·By occurrence of condition subsequent

·By illegality

·By rescission

·By novation

·By cancellation

·By release

·By substituted contract

·By accord and satisfaction

·By account stated

·By lapse

·By effect of running of statute of limitations

Breach of contract is a legal concept in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or

interference with the other party's performance. If the party does not fulfill his contractual promise, or has given information to the other party that he will not perform his duty as mentioned in the contract or if by his action and conduct he seems to be unable to perform the contract, he is said to breach the contract.

Remedies for Breach of Contract

?Damages, which may include:

o Compensatory damages

o Punitive damages

o Incidental damages

o Liquidated damages

o Nominal damages

?Coercive relief

o Specific performance

o Injunctions

o Restitution

o Account of profits

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