Izradio: Lucijan Loje Mentor: prof. dr. sc. Lelija Sočanac

Preview 1.Definition & Terms 2.Essential requirements for valid contract 3.Beneficiaries of a contract (Privity of contract) 4.Remedies for breach of contract 5.Termination of contract

1. Definiton of legal contract „Legally binding agreement between two or more parties which is enforceable by courts” A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law, in some way, recognizes as a duty.

1.1. Terms Conditions or duties which have to be carried out as part of a contract, arrangements which have to be made before a contract is valid Terms Express terms Implied terms Terms that the parties have specifically agreed to Terms which are put into the contract by the courts or by statute

2. Essential requirements for valid contract a)Offer b)Acceptance c)Intention to create legal relations d)Consideration e)Legal capacity of parties

a) Offer It is made by an offeror to an offeree Offeror states his intention to do something or to forbear from something (to refrain from sth) Exists till the withdrawal, expiration or replacement with a counter-offer (proposing a change to the terms of an original offer) Can be accepted only by a specific person or by everyone e.g. person selling a car vs. person looking for a missing pet offering a reward to a person bringing the pet back

b) Acceptance Agreement to the terms of an offer Given in form required by the oferor or in any other form doubtlessly showing the intention of offeree to make a contract (writing, orally, conduct) By the acceptance of offeree (if other requirements are met) converts the offer into a legally binding contract

c) Intention to create legal relations Social and domestic agreements agreements made in a commercial context

d) Consideration anything of value promised to another when making a contract withouth of the element of consideration contract is not legally binding Each party to a contract must be both a promisor and a promisee (receive a benefit and each suffer a detriment)

d) Consideration – rules of consideration 1.The act, forebearance, promise – required economic value 2.The consideration must not be past 3.The consideration must be sufficient but need not be adequate (e.g. 10 $ for house) 4.The consideration must move from the promisee (only party to a contract can give consideration in attention to establish legaly binding contract)

d) Consideration – rules of consideration 5.An existing public duty will not amount to valid consideration 6.An existing contractual duty will not amount to valid consideration 7.Part payment of a debt is not valid consideration for a promise to forego the balance

e) Legal capacity Legal and natural persons can have the legal capacity If a person doesn’t have legal capacity they can not enter into contracts

3. Beneficiaries of a contract (Privity of contract) who can enforce an agreement Usually only parties to a contract have the rights and obligations emerging from the contract Third party can receive benefits from the contract and can use legal remedies 1 1: Contracts (Rights of Third Parties) Act 1999

4. Remedies for breach of contract 1.Damages - an award of money to compensate the innocent party. The primary purpose of damages in contract law is to place the injured party in the position they would have been in if the contract had been performed 2.Repudiation - involves bringing an end to the contract. It is only available for breach of condition as oppose to breach of warranty 3.Rescission - the parties are put back in the position they were in before the contract was entered into, as if the contract never existed

4. Remedies for breach of contract 4.Specific performance - It is an order by the court requiring one party to perform their contractual obligation 5.Injunctions - commands an act that the court regards as essential to justice, or it prohibits an act that is deemed to be contrary to good conscience 6.Restitutionary awards - court orders restitution when it orders the defendant to give up his/her illegal gains to the claimant

5. Termination of contract (Discharge of contract) 1.Performance - both parties have fully performed their contractual obligations 2.Agreement - both parties agree to bring the contract to an end and release each other from their contractual obligations (Accord & Satisfaction are requiered) agreement consideration

5. Termination of contract (Discharge of contract) 3.Breach - Where there exists a breach of condition (as opposed to breach of warranty) this will enable the innocent party the right to repudiate the contract (bring the contract to an end) in addition to claiming damages. A contract cannot be discharged by a breach of warranty. 4.Doctrine of frustration - where there exists a change in circumstances, after the contract was made, which is not the fault of either of the parties, which renders the contract either impossible to perform or deprives the contract of its commercial purpose. Where a contract is found to be frustrated, each party is discharged from future obligations under the contract and neither party may sue for breach.

Thank you for your attention!