RC Steenkamp 18 April 2018
All contracts are agreements, but not all agreements are contracts
EXAMPLES Amazon s Terms of Service: However, this restriction will not apply in the event of the occurrence of a widespread viral infection transmitted via bites or contact with bodily fluids that causes human corpses to reanimate and seek to consume living human flesh, blood, brain or nerve tissue and is likely to result in the fall of organized civilization Tumblr s Terms of Use:
EXAMPLES On April 1, 7 500 people who placed an order on GameStation s website agreed: to grant [GameStation] a non-transferable option to claim, for now and for ever more, your immortal soul. Should We wish to exercise this option, you agree to surrender your immortal soul, and any claim you may have on it, within 5 (five) working days of receiving written notification from gamesation.co.uk or one of its duly authorized minions Manny Ramirez free sushi?
EXAMPLES Rollie Fingers Extra $100 a year for growing his moustache Queen Latifah? IMAGE: https://www.google.de/search?q=rollie+fingers&source=lnms&tbm=isch&sa=x&ved= 0ahUKEwi9nIz46M_aAhVOZFAKHeIhAkwQ_AUICigB&biw=1680&bih=944#imgrc=94c-T_4reLtOWM:
INTRODUCTION What is a contract? What does this definition mean? Are all contracts entered into voluntarily?
FORMATION OF A CONTRACT Principle of freedom of contract Consists of two elements? Generally, this principle means that? Courts will not interfere simply because one party is in a stronger bargaining position than the other; So, effectively, anyone can choose to enter any type of contract with any type of person that he wants to Problems with this? Is this freedom unlimited?
FORMATION OF A CONTRACT Standard form contracts today? Public policy? California s Codes, Covenants and Restrictions regarding houses built before 1959 includes a clause stating that: no person of African, Japanese, Chinese, or Mongolian descent, shall use or occupy any such property, or any part thereof, unless such persons are employed as servants by a Caucasian occupant of some portion of such property Given the possibility for abuse, true freedom of contract no longer exists
REQUIREMENTS FOR A CONTRACT Four requirements for a contract: 1. Offer and acceptance; 2. Consideration; 3. Intention to create legal obligations; 4. Formal requirements
1 OFFER AND ACCEPTANCE One party makes an offer and the other accepts Two separate actions but one requirement Offeror and offeree Who is who?
2 CONSIDERATION Unique to the common law system Requires an element of reciprocity an offer is only binding if it is supported by consideration Emphasis is on the exchange
2 CONSIDERATION Bilateral vs unilateral contracts Unilateral contracts are difficult to enforce The effect of reciprocity on unilateral contracts? IMAGE: https://www.google.de/search?biw=1680&bih=944&tbm=isch&sa=1&ei=dytdwuryazlvwalwiiqcw&q=lost+dog +%245000&oq=lost+dog+%245000&gs_l=psy-ab.3...48462.56555.0.57260.8.8.0.0.0.0.53.283.8.8.0...0...1c.1.64.psyab..0.2.91...0j0i67k1j0i24k1.0.2QsirerJ92s#imgrc=VgzU121uGZH3JM:
2 CONSIDERATION Established what consideration is but what can or should consideration consist of? How do you measure the consideration required? Valid consideration includes something that is of the same value in the eyes of the law
2 CONSIDERATION 3 basic rules of consideration? Consideration should be sufficient but not necessarily adequate Past consideration is not good consideration Consideration must move from the offeree to the offeror (although not necessarily the offeror) Valid consideration = sufficient + adequate consideration. Sufficient + adequate consideration means that nominal consideration is acceptable
3 INTENTION TO CREATE LEGAL OBLIGATIONS Parties must intend that any dispute that may arise out of the contract will be resolved by a court Gentlemen s agreement? It is up to each party to show that the necessary intention existed when the contract was formed IMAGE: https://www.google.de/search?q=intentional+accidental&source=lnms&tbm=isch&sa=x&ved=0ahukewj99kcv6s _aahvhmbqkhq_ldj0q_auicygc&biw=1680&bih=944#imgrc=cneetelsoujg1m:
4 FORMAL REQUIREMENTS General rule? Exceptions? Certain types of contracts have to meet certain formalities Result of non-compliance with formalities? Unilateral contracts as deeds? IMAGE: https://www.google.de/search?biw=1680&bih=944&tbm=isch&sa=1&ei=e4xdwvedoivfwakt5yt4cw&q=deed&o q=deed&gs_l=psy-ab.3..0i67k1l2j0j0i10i67k1j0l6.2379.2379.0.2705.1.1.0.0.0.0.46.46.1.1.0...0...1c.1.64.psyab..0.1.45...0.jpcnz87gq7m#imgrc=kw2oquehdf0l9m:
CONTENTS OF THE CONTRACT Express vs. implied terms? What is an express term? 3 types of implied terms IMAGE: https://www.google.de/search?q=a1+bakery&source=lnms&t bm=isch&sa=x&ved=0ahukewjb2ou_6s_aahxek1akhcluakuq _AUICygC&biw=1680&bih=944#imgrc=xAbao5EpVT7bsM: IMAGE: https://www.google.de/search?q=caution+hot+mccafe&source=lnms &tbm=isch&sa=x&ved=0ahukewian8fz6s_aahvrjvakhcuxaq8q_au ICigB&biw=1680&bih=944#imgrc=Y9WigiYHXwC5UM:
CONTENTS OF THE CONTRACT Conditions, warranties Conditions: major terms of the contract; they go to the root of the contract Warranties: minor terms of the contract; they are not central to the existence of the contract Result of breach? Innominate terms: Innominate terms look at the effect of the breach and question to what extent the innocent party was damaged/deprived; a term that is seen as being in a no-man s land Hong Kong Fir Shipping v Kawasaki Kisen Kaisha deprived of the whole of the benefit they were entitled to under the contract
CONTENTS OF THE CONTRACT Standard form contracts: Drawn up in advance and presented to all potential contracting parties Advantages and disadvantages?
Life is a reciprocal exchange. Life is a contract. To move forward, you have to give back Oprah Winfrey