Introduction to contracts

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12 Terms

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What is contract?

A legally binding agreement between two or more persons, by which rights are acquired by one or more to acts or forbearances on the part of the other or others

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Duties promised by parties

  1. Doing or not doing certain acts for parties

  2. Giving rights to the other person

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contract can exist in

1.oral

2.by conduct (behaviour)

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examples of contract by oral

Buying food

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Disadvantage of oral conduct

no written record —>uncertainty

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ELEMENTS of a legally binding contract

1.Offer and acceptance

2.Consideration (exchange of promise between parties)

3.Intention to create a legally binding relationship (want their contract to be legally enforceable)

4.legal capacity (mature enough/ above 21)

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Breach of contract

When one party refuses to perform his contractual duties

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Consequence of a breach of contract

sued in court + defendent must pay losses directly caused by the breach (pg 22)

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3 types of contracts that is invalid even tho elements of a legally binding contract is present

1.void

2.voidable

3.unenforceable

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Void contracts

Contract will act as it has never existed (e.g. goods/monies will return to its original position). Cannot claim damages

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Voidable contracts

Stop the contract, usually are parties suffering under the contract due to an inappropriate act committed by the other party

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Unenforceable contract

no successful court action however goods/monies exchanged may be kept by the parties.