contractual requirements management and legal skills

Contractual Requirements

Management and Legal Skills

Law of Contract - Definition

An agreement which creates or is intended to create a legal obligation between the parties to it.

http://www.scotland.gov.uk/Topics/Justice/law/damages/contract

Law of Contract - Definition

An agreement which creates or is intended to create a legal obligation between the parties to it.

http://www.scotland.gov.uk/Topics/Justice/law/damages/contract

There must always be at least two parties to an agreement

Law of Contract - Definition

An agreement which creates or is intended to create a legal obligation between the parties to it.

http://www.scotland.gov.uk/Topics/Justice/law/damages/contract

There must be ‘consensus in idem’,

meaning ‘agreement about the same thing’

Law of Contract - Definition

An agreement which creates or is intended to create a legal obligation between the parties to it.

http://www.scotland.gov.uk/Topics/Justice/law/damages/contract

A social or personal obligation (eg we

agree to go out for a meal) does NOT

create a legal obligation

How a contract is formed There is an offer by one party, and an

acceptance by the other. The offer and acceptance can be spoken

or written. The offer and acceptance can be

inferred from the actions of the parties.

How a contract is formed

An offer by one party, and an acceptance by the other.

The offer and acceptance can be spoken or written.

The offer and acceptance can be inferred from the actions of the parties.

So if you take goods to a cash desk in a shop

this shows you are offering to buy. The

cashier’s acceptance of your payment shows

he/she is accepting your offer.

Offer, or willingness to negotiate

An offer is a statement of willingness to contract on specific terms. If the terms are accepted the contract is binding.

Willingness to negotiate is an invitation to offer, eg advertising goods for sale, catalogues or display of goods in a shop window

Acceptance Must meet the offer – agreement on the

same thing. In this case a lawful contract has been formed.

If acceptance includes terms that were not in the offer, no contract is formed. This would be a counter-offer, which

would need to be accepted by the other party for a contact to be formed.

Time of Acceptance

If the offer is stated to be open for a period of time it cannot be revoked within that time. If it is accepted within that time a contract is formed.

For acceptances made by post, the acceptance time is determined by the date and time it was posted.

Recall of offer

If the offerer undertakes to keep the offer open for a definite period, it cannot be recalled within that time.

If the offerer states that acceptance must be made within a specified time, and that period of time lapses, the offer is automatically recalled.

Recall of Offer If the offerer does not state a time within

which acceptance must be made, the offer remains open for a ‘reasonable time’.

Where there is no promise to keep the offer open for a period of time, it can be recalled at any time before it is accepted.

An offer is automatically recalled by the death, insanity or bankruptcy of either party.

Recall of Acceptance If an acceptance was posted and the

party change their mind regarding acceptance they can send another communication: If the second communication arrives after

the first, the acceptance is binding. If the second communication arrives at

the same time or before the first, there is no binding contract.

Matters affecting the validity of a contract

Contracts can be: Void – there is no contract Voidable – they are valid but can be set

aside Unenforceable – cannot be enforced by

the courts

Matters affecting the validity of a contract

Contracts can be: Void – there is no contract Voidable – they are valid but can be set

aside Unenforceable – cannot be enforced by

the courts

Eg people under 16 have no capacity to contract – any contract made is void. Contracts with insane people are also void.

Matters affecting the validity of a contract

Contracts can be: Void – there is no contract Voidable – they are valid but can be set

aside Unenforceable – cannot be enforced by

the courts

Eg people between 16-18 can apply to court to have contract set aside. So can people who entered into a contract whilst intoxicated.

Matters affecting the validity of a contract

Contracts can be: Void – there is no contract Voidable – they are valid but can be set

aside Unenforceable – cannot be enforced by

the courts

Eg sporting agreements or gambling agreements are unenforceable by the courts.

Error and Misrepresentation Mutual error – both parties have

misunderstood – contract is void/voidable Unilateral error – one party has paid

more for something that it is worth Innocent misrepresentation – making a

false statement, believing it to be true Fraudulent misrepresentation – making a

false or reckless statement, unaware whether it’s true

Breach of Contract One of the parties fails to carry out

his/her obligations Other party is entitled to damages or

compensation Breaches can be:

Failing to perform the contract Delaying performance (missing a

deadline) Unsatisfactory or defective performance

Breach of Contract One of the parties fails to carry out

his/her obligations Other party is entitled to damages or

compensation Breaches can be:

Failing to perform the contract Delaying performance (missing a

deadline) Unsatisfactory or defective performance

Refusing to carry out his/her part of agreement. Innocent party has right to withdraw.

Breach of Contract One of the parties fails to carry out

his/her obligations Other party is entitled to damages or

compensation Breaches can be:

Failing to perform the contract Delaying performance (missing a

deadline) Unsatisfactory or defective performance

If timing is important, in

nocent

party has right to withdraw. Not

the case if timing not im

portant

but damages may be claimed if

appropriate.

Breach of Contract One of the parties fails to carry out

his/her obligations Other party is entitled to damages or

compensation Breaches can be:

Failing to perform the contract Delaying performance (missing a

deadline) Unsatisfactory or defective performance

Depends on le

vel –

may be able to

withdraw if

breach is

material

Now complete the worksheet to test your

knowledge

Some Further Resources

www.musiclawupdates.com http://www.scotland.gov.uk/Topics/Justic

e/law/damages/contract