CONTRACTS

IMPORTANT CONTRACTS ARE BINDING FREEDOM OF CONTRACT

FORMS OF CONTRACT Generally the contracting parties may decide the form of the contract Written Oral Implied

CONTRACTS ACT OFFER + ACCEPTANCE = CONTRACT

OFFER Offer becomes binding when the offeree learns about it => Offer can be revoked if the revocation reaches the offeree before or simultaneously with the offer

ACCEPTANCE The offeree must respond within a reasonable time Oral offers must be responded immediately Acceptance becomes binding when the offeror learns about it => can be revoked if the revocation reaches the offeror before or simultaneously with the acceptance

specifically adressed OFFER valid, detailed and specifically adressed 1 3 ACCEPTANCE on time and In accordance with the terms of the offer REPLY delayed or modified 2 REFUSAL COUNTER OFFER CONTRACT OFFER LAPSES

Late acceptance Constitutes a new offer Unless The offeree has reasonably assumed that the acceptance has reached the offeror within due time and the offeror must have understood it => the contract is deemed concluded by way of the acceptance unless the offeror notifies

Modified acceptance Is a rejection to the offer and constitutes a counter offer Can exceptionally constitute a valid contract: If the offeree reasonably thinks his answer equals to the offer and the offeror must have understood this and he does not notify

WAYS TO CONCLUDE A CONTRACT Contracts Act: Identical offer and acceptance Sufficient to contain legal effects Required by specific acts, trade practices or the contract Specified form Requirements regarding the document, witnesses etc. ”Real contract” Completed performance is a prerequisite for the contract being effective

BONA FIDE One is in GOOD FAITH if one Did not know and Should not have known about the circumstances

REPRESENTATION

Who can sell a truck owned by a company Who can sell a truck owned by a company? Who can sell a bicycle owned by 15 years old Liisa?

REPRESENTATION (1) A person appears on behalf of another person Representative Agent Merchandise THIRD PARTY PRINCIPAL Money

REPRESENTATION (2) Based on: Forms: Prescription of law Commission Direct representation Contract will be in the name of the principal Indirect representation Contract will be in the name of the representative

1. REPRESENTATION BASED ON A PRESCRIPTION OF LAW Representative of a juristic person Depends on the form of the juristic person, F. Ex. Limited Liability Company: The Board of Directors Representative of a legally incompetent natural person Minors: holders of parental responsibility In other cases appointed by Court or Registry Office Performs legal acts on behalf of a legally incompetent person For certain legal acts the representative needs the permission of the Registry Office

2. REPRESENTATION BASED ON COMMISSION Letter of authorization/power of attorney Notice to a third party Appointment of a procurator Authorisation on basis of one’s position Oral authorisation Power of attorney

REPRESENTATIVE (AGENT) 1. DIRECT REPRESENTATION In the name and on behalf of the principal Contracting parties are the principal and the third party > Contract is binding to the principal, not to the representative Goods Contract P.Principal T.Third REPRESENTATIVE (AGENT) PRINCIPAL THIRD PARTY Money

REPRESENTATIVE (AGENT) 2. INDIRECT REPRESENTATION In the name of the representative, on behalf of the principal Contracting parties are the representative and the third party Goods Contract A.Agent T.Third REPRESENTATIVE (AGENT) THIRD PARTY PRINCIPAL Money

I authorise Pekka Pykälän (160666-666Z) to sell CASE 1 Jussi lived abroad and wished to sell his piano which was in his Helsinki apartment. He authorised Pekka by the following letter of attorney: I authorise Pekka Pykälän (160666-666Z) to sell my white Hellas piano on behalf of me. Sydney, 14.4.2004 Jussi Jussila Pekka sold at a good price the piano and also the music books Jussi had left sitting on the piano. He sent the money to Jussi. How do you comment the case?

Agent’s competence: Always shows outwards => if exceeded, the principal will not be bound PRINCIPAL Agency agreement AGENT Damages Contract P.Principal T.Third Power of Attorney ”Piano” => COMPETENCE Goods THIRD PARTY ?

CASE 2 Jussi lived abroad and wished to sell his piano which was in his Helsinki apartment. He authorised Pekka by the following letter of attorney: I authorise Pekka Pykälän (160666-666Z) to sell my white Hellas piano on behalf of me. Sydney, 14.4.2004 Jussi Jussila Jussi told Pekka to try first to sell the piano at €1.000, and not to sell it under € 800. Since there were very few potential buyers, Pekka finally sold the piano at € 740 eurolla and sent the money to Jussi. Give your comments?

Power or attorney: ”Piano” Agent’s authority: Based on the Agency agreement => Even if exceeded, the principal will be bound if the third party was in good faith PRINCIPAL Agency agreement ” € 800” => AUTHORITY AGENT € 60 Contract € 740 P.Principal T.Third Power or attorney: ”Piano” Goods => COMPETENCE ? 740 THIRD PARTY

COMPETENCE AUTHORITY INSTRUCTIONS AUTHORISATION