Contract

Contract

1. Definition

   • A contract is a set of promises in the form of an agreement between two parties who agree to give or do something in return for the promise.
   • An agreement on specific terms between two parties in exchange for a valuable benefit know as consideration. Such an agreement is legally binding and enforceable by law.
   • An agreement between two or more parties that is legally binding.

2. Elements of contract

3. Discharging of contract

   • Performance
   • Agreement
   • Breach
   • Fustration

4. Purpose of a contract

   • To facilitate planning of projects
   • To establish commercial responsibilities and obligations
   • To allocate business risks in advance
   • To provide remedies if things go wrong (e.g. in the case of building defects)

5. Vitiating factor

   • Incapacity
     • Minors
     • Mentally unsound
     • Intoxicated person
   • Illegality
   • Duress or Undue Influence
   • Misrepresentation
     • Fraudulent
       • A false representation that is made knowingly, without belief in its truth and recklessly
     • Negligent
       • Negligent misrepresentation is carelessly made while having no reasonable basis to believe it is true or false
     • Innocent
       • Innocent misrepresentation is made when the representor has reasonable grounds to believe it is ture
     • Remedy
       • Recission is a remedy that puts the parties back into a position as if the contract had never taken place
       • Damages are claims for losses suffered by the claimant; in some cases loss of profit and opportunity
   • Mistake
     • Common Mistake
       • Occurs when both parties make the same fundamental mistake of fact
     • Mutual Mistake
       • Occurs when the parties misunderstand each other and are at cross-purposes, and are not aware of each other's mistake
     • Unilateral Mistake
       • Occurs when only one party is mistake. The other party knows or ought to have known the first party's mistake
     • Non Est Factum
       • Non est factum arises when a party signs a document that is fundamentally different in character from that which she contemplated