Conclusion of contracts

Conditions for a valid contract

1. Consensus

2. Capacity to act (judgement) and legally enter contract and bind themselves to the agreements

3. Form requirements being correct

4. Lawful content and moral

Explain the steps of contract consensus

Intents match —> consensus

If they dont:

If the declaration of what they said as intent doesn’t match there is open dissent so no contract

If declarations match, theres principle of trust meaning would a reasonable third party have understood the declaration as one of the parties did.

If the principle of trust leads to yes, theres normative consensus. If it leads to no, its hidden dissent.

Open dissent: straight up disagree

Hidden dissent: ambigous terms etc

What are the form requirements for a contract to be valid? For none and for special form.

If theres no special form required, verbal, tacit or implied forms of intent suffice.

With special form theres simple written form, qualified written form, and public deed

Simple written form: Written declaration with handwritten signature (co 13/14)

Qualified written form: Same as simple form but declarations must be written

Public deed: As simple written form but notarization is needed.

What are grounds for having obligation?

Legal reasons like buying something and signing a contract.

Law, which means the obligation is automatically formed such as:

Tort: causing harm or loss to someone, leading to legal liability for the person who caused it

Unjust enrichment: getting something you shouldn’t have under no legal grounds. Like getting 2x of your salary by accident.

Other grounds:

Fault in the conclusion of the contract (culpa in contrahendo) means it holds the party liable for negligient behavior or acting in bad faith even before the contract is even signed

Agency without authority: if someone signs without authority to do so like bad judgement, minor, or not allowed.

Whats act of committment and act of performance?

Act of commitment: Upon conclusion of the contract, the parties undertake to render performance to the other party.

Act of performance: obligor renders performance and transfer ownership for eg

When is a contract invalid?

Impossible, unlawful and immoral

What are the conditions for capacity to act?

What can minors participate in?

Good judgement and 18+ and not under protection of guardians, you have full capacity to act

If under age and of good judgement, they have limited capacity to act.

If under age and of bad judgement, they have full incapacity to act.

If 18+ and good judgement but under protection of adults, they have limited capacity to act.

Minors can take part in minor transactions but expensive ones may need approval of guardian eg a rolex

If you have mental illness or under drugs / alcohol, you have bad judgement and no capacity to act