Date post: | 07-Apr-2018 |
Category: |
Documents |
Upload: | debashish-goswami |
View: | 227 times |
Download: | 0 times |
of 27
8/6/2019 Contractual Law Intro
1/27
Introduction to LawIntroduction to LawLaw of ContractsLaw of Contracts
What is a contract?What is a contract?
8/6/2019 Contractual Law Intro
2/27
22
Learning ObjectivesLearning Objectives
Quick ReviewQuick Review
Definition of a ContractDefinition of a Contract
Simple Contracts and Written ContractsSimple Contracts and Written Contracts
Legal Effect of ContractsLegal Effect of Contracts
Why we have a Law of ContractWhy we have a Law of Contract
8/6/2019 Contractual Law Intro
3/27
33
Important DefinitionsImportant Definitions
Legally bindingLegally binding
Legally enforceableLegally enforceable
RemediesRemedies
ParolParol (simple) contracts(simple) contracts
DeedDeed
Conveyances of landConveyances of land
Bill of exchangeBill of exchange
Valid, void, voidable and unenforceable contractsValid, void, voidable and unenforceable contracts
8/6/2019 Contractual Law Intro
4/27
44
Quick ReviewQuick Review
Earlier, we saw that you can divide law intoEarlier, we saw that you can divide law into
different categoriesdifferent categories
Evolving from the basic social contract, someEvolving from the basic social contract, someof those categories wereof those categories were
private law v. public lawprivate law v. public law
civil law v. criminal lawcivil law v. criminal law
8/6/2019 Contractual Law Intro
5/27
55
Quick Review (cont.)Quick Review (cont.)
Private LawPrivate Law deals with the relationshipsdeals with the relationshipsbetween ordinary people in everydaybetween ordinary people in everydaytransactionstransactions
That includes you and me, as well asThat includes you and me, as well asbusinesses and companiesbusinesses and companies
Private Law includes the law of contract andPrivate Law includes the law of contract andthe law of tortthe law of tort
8/6/2019 Contractual Law Intro
6/27
66
Quick Review (cont.)Quick Review (cont.)
In this category,In this category, civil lawcivil law deals with the relationshipsdeals with the relationshipsbetween individual citizensbetween individual citizens
Its purpose is to settle arguments between individualsIts purpose is to settle arguments between individuals
It helps people to find remediesIt helps people to find remedies
it doesnt really punish people unless specifically outlinedit doesnt really punish people unless specifically outlinedas per act or lawas per act or law
Civil Law includes all Private Law so it includes the LawCivil Law includes all Private Law so it includes the Lawof Contractof Contract
8/6/2019 Contractual Law Intro
7/27
8/6/2019 Contractual Law Intro
8/27
88
Definition of a contractDefinition of a contract
A legally binding agreement;A legally binding agreement;
that means there must be some kind of agreementthat means there must be some kind of agreementbetween two partiesbetween two parties
However, not all agreements are contracts becauseHowever, not all agreements are contracts becausenot all agreements are legally enforceablenot all agreements are legally enforceable
It must be legally enforceable;It must be legally enforceable;
means that a court will say that an agreement is ameans that a court will say that an agreement is acontractcontract
See textbook (See textbook (BansalBansal) for complete definition) for complete definition
8/6/2019 Contractual Law Intro
9/27
99
Definition of a contract (cont.)Definition of a contract (cont.)
To decide if an agreement is legallyTo decide if an agreement is legallyenforceable as a contract, a court will applyenforceable as a contract, a court will applythe rules and principles of the law of contractthe rules and principles of the law of contract
Therefore, knowing a little about these rulesTherefore, knowing a little about these rulescan help businesspeople to create validcan help businesspeople to create validcontractscontracts
8/6/2019 Contractual Law Intro
10/27
1010
Simple ContractsSimple Contracts
There isThere is nono general rule in English law that a contractgeneral rule in English law that a contractmust be in writingmust be in writing
In fact, as we saw from our examples at the beginningIn fact, as we saw from our examples at the beginningof the class, in many situations people do not realiseof the class, in many situations people do not realisethat they are making a contractthat they are making a contract
Some contract can be made verbally or by actionsSome contract can be made verbally or by actions
These are known asThese are known as parolparol oror simplesimple contractscontracts
But as per Indian law, a contract to be legal must be inBut as per Indian law, a contract to be legal must be inwriting amongst other requirements.writing amongst other requirements.
8/6/2019 Contractual Law Intro
11/27
1111
Simple Contracts (cont.)Simple Contracts (cont.)
Although there is no requirement for a simple contractAlthough there is no requirement for a simple contractto be in writing, sometimes the parties might record theto be in writing, sometimes the parties might record thecontract in writingcontract in writing
This can be useful later if there is disagreement aboutThis can be useful later if there is disagreement aboutthe contractthe contract
If the contract is important or involves a lot of money itIf the contract is important or involves a lot of money itmight be wise to put it in writingmight be wise to put it in writing
8/6/2019 Contractual Law Intro
12/27
1212
DeedsDeeds
DeedsDeeds are kind of contract whichare kind of contract which must alwaysmust always be inbe inwritingwriting
Conveyancesof landConveyancesof land: this is the legal process of: this is the legal process oftransferring the ownership of land from one party totransferring the ownership of land from one party toanotheranother
This is different from the agreement to sell the landThis is different from the agreement to sell the land
The conveyance follows the agreement to sellThe conveyance follows the agreement to sell
8/6/2019 Contractual Law Intro
13/27
1313
Contracts which must be inContracts which must be in
WritingWriting Some contracts must be in writing but theySome contracts must be in writing but they
dont have to be by deeddont have to be by deed
Most of these requirements come fromMost of these requirements come fromStatutory law or government circulars forStatutory law or government circulars forexample.example.
Some examples of written contracts;Some examples of written contracts;
bills of exchangebills of exchange
contracts for the sale of landcontracts for the sale of land
8/6/2019 Contractual Law Intro
14/27
1414
Legal EffectLegal Effect
As we mentioned earlier, contracts areAs we mentioned earlier, contracts areagreements, but not all agreements are legallyagreements, but not all agreements are legallyenforceable contractsenforceable contracts
In fact, the legal effect of agreements fall intoIn fact, the legal effect of agreements fall into4 categories4 categories
Valid contractsValid contracts
Void contractsVoid contracts
Voidable contractsVoidable contracts
Unenforceable contractsUnenforceable contracts
8/6/2019 Contractual Law Intro
15/27
1515
Valid ContractsValid Contracts
These are agreements which are completelyThese are agreements which are completelybinding and enforceablebinding and enforceable
Parties to valid contracts gain rights andParties to valid contracts gain rights andresponsibilitiesresponsibilities
The courts will make sure that the partiesThe courts will make sure that the partiesfollow these rights and responsibilities if therefollow these rights and responsibilities if thereis any argumentis any argument
8/6/2019 Contractual Law Intro
16/27
1616
Essentials of a Valid ContractEssentials of a Valid Contract
Offer and acceptanceOffer and acceptance
Intention to create legal relationsIntention to create legal relations
Requirement of written formalities in some casesRequirement of written formalities in some cases
Parties must have capacity to contractParties must have capacity to contract
Actual consent by the parties to the terms of the contractActual consent by the parties to the terms of the contract
Contract must not be against public policyContract must not be against public policy
8/6/2019 Contractual Law Intro
17/27
1717
Void ContractsVoid Contracts
In fact, these are not contracts at allIn fact, these are not contracts at all
They have no legal effectThey have no legal effect
As we will see in later classes, there are a number ofAs we will see in later classes, there are a number ofthings which can make a contract voidthings which can make a contract void
E.g. fraud, mistake, coercionE.g. fraud, mistake, coercion etcetc
The important thing to remember is that you cannotThe important thing to remember is that you cannotenforce a void contractenforce a void contract
8/6/2019 Contractual Law Intro
18/27
1818
Void ContractsVoid Contracts -- ExampleExample
DG gives his students so much homework that theyDG gives his students so much homework that theydecide to kill himdecide to kill him
They pay aThey pay a mumbaimumbai hitmanhitman 5000 Rupees to kill DG5000 Rupees to kill DG
However, theHowever, the hitmanhitman simply spends all the money insimply spends all the money inbars in Guwahati and then goes home without killing DGbars in Guwahati and then goes home without killing DG
The students cannot claim their money back because itThe students cannot claim their money back because itis illegal to hire ais illegal to hire a hitmanhitman to kill someoneto kill someone
8/6/2019 Contractual Law Intro
19/27
1919
Voidable ContractsVoidable Contracts
This kind of contract is valid unless oneThis kind of contract is valid unless oneof the parties has it set aside (i.e.of the parties has it set aside (i.e.
declared void)declared void)
This could happen where one party isThis could happen where one party istricked into entering a contract by thetricked into entering a contract by the
other partyother party
8/6/2019 Contractual Law Intro
20/27
2020
Voidable ContractsVoidable Contracts -- ExampleExample
DG pays for a holiday in Tibet because theDG pays for a holiday in Tibet because thetravel service shows him pictures of a lovely 5travel service shows him pictures of a lovely 5star hotel instar hotel in LlahsaLlahsa
However, when he arrives, Daniel finds thatHowever, when he arrives, Daniel finds thatthe hotel is still being constructed.the hotel is still being constructed.
There is a room where he can stay, but not allThere is a room where he can stay, but not allthe facilities are available and the hotelthe facilities are available and the hotelcertainly doesnt look like the picturescertainly doesnt look like the pictures
8/6/2019 Contractual Law Intro
21/27
2121
Voidable ContractsVoidable Contracts ExampleExample
(cont.)(cont.) Assuming that the travel company knew about theAssuming that the travel company knew about the
hotel, then they have made a misrepresentation to DGhotel, then they have made a misrepresentation to DGwhich made him enter into the contract for the holidaywhich made him enter into the contract for the holiday
DG could now choose to set aside the contract and goDG could now choose to set aside the contract and goafter the travel companyafter the travel company
However, he could decide that things are not to bad andHowever, he could decide that things are not to bad andthat he can still have a good holidaythat he can still have a good holiday
So the contract is not automatically void (like with theSo the contract is not automatically void (like with thehit man), it is voidable at DGs choicehit man), it is voidable at DGs choice
8/6/2019 Contractual Law Intro
22/27
2222
Unenforceable ContractsUnenforceable Contracts
These are agreements which are legal butThese are agreements which are legal butwhich cannot be enforced in court for somewhich cannot be enforced in court for somereasonreason
For example, a time limit for enforcing theFor example, a time limit for enforcing thecontract may have expiredcontract may have expired
Examples would include FMCGs,Examples would include FMCGs,pharmaceutical OTIs and almost any retailpharmaceutical OTIs and almost any retailproduct on the market.product on the market.
8/6/2019 Contractual Law Intro
23/27
2323
Whyhave a Law of Contract?Whyhave a Law of Contract?
As we saw from the examples at the beginningAs we saw from the examples at the beginningof the class, contracts arise in simple,of the class, contracts arise in simple,everyday situationseveryday situations
Modern society operates by people andModern society operates by people andcompanies exchanging goods and servicescompanies exchanging goods and services
The Law of Contract helps to give a structureThe Law of Contract helps to give a structureto thisto this
8/6/2019 Contractual Law Intro
24/27
2424
Whyhave a Law of Contract?Whyhave a Law of Contract?
The Law of Contract is part of Private Law so it isThe Law of Contract is part of Private Law so it isconcerned with relationships between partiesconcerned with relationships between parties
It helps us to decide what is a valid contractIt helps us to decide what is a valid contract
The Law of Contract is also part of Civil Law so it is alsoThe Law of Contract is also part of Civil Law so it is alsoconcerned with remediesconcerned with remedies
It helps us the other party to a contract does not keepIt helps us the other party to a contract does not keepto the agreementto the agreement
8/6/2019 Contractual Law Intro
25/27
2525
SummarySummary
A contract isA contract is a legally binding agreementa legally binding agreement
Simple contractsSimple contracts do not have to be in writing but thendo not have to be in writing but then
they cannot be enforced and hence cannot be calledthey cannot be enforced and hence cannot be calledcontractscontractsper seper se
the legal effect of contracts fall into 4 categories:the legal effect of contracts fall into 4 categories: Valid contractsValid contracts
Void contractsVoid contracts
Voidable contractsVoidable contracts Unenforceable contractsUnenforceable contracts
8/6/2019 Contractual Law Intro
26/27
2626
Summary (cont.)Summary (cont.)
Business is an important part of modern societyBusiness is an important part of modern society
The Law of Contract tells us what is necessary to makeThe Law of Contract tells us what is necessary to makea valid contracta valid contract
It also gives us remedies where another person doesIt also gives us remedies where another person doesnot follow the terms of the contractnot follow the terms of the contract
8/6/2019 Contractual Law Intro
27/27
2727
ReadingReading
Business & Corporate Laws by C LBusiness & Corporate Laws by C LBansalBansal
Chapters 1Chapters 1--14 (14 (PgsPgs 33--145)145)
Refer to the case studies mentionedRefer to the case studies mentionedand try to find similar case studiesand try to find similar case studiesonline.online.