1. CONTRACTS

2. IMPORTANT
CONTRACTS ARE BINDING
FREEDOM OF CONTRACT

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

4. CONTRACTS ACT
OFFER +
ACCEPTANCE =
CONTRACT

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

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

12. REPRESENTATION

13. 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?

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

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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 ( Z) to sell
my white Hellas piano on behalf of me.
Sydney,
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?

21. 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 ?

22. 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 ( Z) to sell
my white Hellas piano on behalf of me.
Sydney,
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?

23. 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

24. COMPETENCE
AUTHORITY
INSTRUCTIONS AUTHORISATION