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

1. Izradio: Lucijan Loje Mentor: prof. dr. sc. LelijaSočanac

2. Preview • Definition & Terms • Essentialrequirements for validcontract • Beneficiariesof a contract (Privityofcontract) • Remedies for breachofcontract • Terminationofcontract

3. 1. Definitonoflegalcontract • „Legallybindingagreementbetweentwo or more partieswhich is enforceablebycourts” • 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.

4. 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 that the parties have specifically agreed to Termswhich are put into the contract by the courts or by statute

5. 2. Essentialrequirements for validcontract • Offer • Acceptance • Intention to create legal relations • Consideration • Legal capacityofparties

6. a) Offer • It is made by an offeror to an offeree • Offerorstateshisintention to do something or to forbearfromsomething (to refrainfromsth) • Existstillthewithdrawal, expiration or replacementwith a counter-offer (proposinga change to the terms of an original offer) • Canbeacceptedonlyby a specificperson or byeveryone e.g. personselling a car vs. personlooking for a missing pet offering a reward to a personbringingthe pet back

7. b) Acceptance • Agreement to thetermsofanoffer • Giveninformrequiredbytheoferor or inanyotherformdoubtlesslyshowingtheintentionofofferee 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

8. c) Intention to create legal relations • Socialanddomesticagreements • agreements made in a commercial context

9. d) Consideration • anything of value promised to another when making a contract • withouthofthe element ofconsiderationcontractisnotlegallybinding • Each party to a contract must be both a promisor and a promisee (receive a benefit and each suffer a detriment)

10. d) Consideration– rulesofconsideration • Theact, forebearance, promise– requiredeconomicvalue • The consideration must not be past • The consideration must be sufficient but need not be adequate (e.g. 10 $ for house) • The consideration must move from the promisee (onlyparty to a contractcangiveconsiderationinattention to establishlegalybindingcontract)

11. d) Consideration– rulesofconsideration • An existing public duty will not amount to valid consideration • An existing contractual duty will not amount to valid consideration • Part payment of a debt is not valid consideration for a promise to forego the balance

12. e) Legal capacity • Legal andnaturalpersonscanhavethelegalcapacity • If a persondoesn’thavelegalcapacitytheycannotenterintocontracts

13. 3. Beneficiaries of a contract (Privity of contract) • who can enforce an agreement • Usuallyonlyparties to a contracthavetherightsandobligationsemergingfromthecontract • Third partycanreceivebenefitsfromthecontractandcan use legal remedies1 1: Contracts (Rights of Third Parties) Act 1999

14. 4. Remedies for breach of contract • 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 ifthe contract hadbeen performed • Repudiation- involves bringing an end to the contract. It is only available for breach of condition as oppose to breach of warranty • Rescission- the parties are put back in the position they were in before the contract was entered into, as if the contract never existed

15. 4. Remedies for breach of contract • Specificperformance- It is an order by the court requiring one party to perform their contractual obligation • 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 • Restitutionaryawards- court orders restitutionwhenit orders the defendant to give up his/herillegalgains to the claimant

16. 5. Terminationofcontract(Dischargeofcontract) • Performance- both parties have fully performed their contractual obligations • Agreement- both parties agree to bring the contract to an end and release each other from their contractual obligations (Accord & Satisfaction are requiered) agreementconsideration

17. 5. Termination of contract(Discharge of contract) • Breach- Where there exists a breach of condition (as opposedto 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. • 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.

18. Thankyou for yourattention!