Chapter4 - Law of Juristic Act and

Contract

Juristic Act

Juristic Act

• Human acts that create legal effect can be categorized into juristic acts and legal causes.

Legal effect

Definition (Section 149)

• Voluntary lawful acts• Immediate purpose to establish between

persons juristic relation, to CREATE, MODIFY, TRANSFER PRESERVE or EXTINGUISH RIGHTS.

Validity of a Juristic Act

• 1.Capacity-The person doing the juristic act must have capacity to enter into legal transaction. Juristic act is voidable.

• 2.Objective-The final intention that the parties to the juristic act aimed at.

-Expressly prohibited by law-The objective is impossible.-Contrary to public order or good moral is void

• 3.Forms-An act which is not in the form prescribed by law is void.

• 4.Declaration of intention1.) The express intention differs from the hidden

intention-Not void, unless his intention was known to the other party.

2.) Fictitious declaration of intention- Void : but its invalidity cannot be set up against third person injured.

3.) Concealed juristic act-If a declaration of intention under paragraph one is made to conceal another juristic act, the provisions of law relating to the concealed act shall apply.

4.) Mistake to an essential element of the juristic act-A declaration of intention is void.

-Three circumstances –Mistake (Nature of the contract, Identity of the parties, Property being an object of the juristic act.)

5.) Mistake to a quality of the person or property- A declaration is voidable.

-Two circumstances-Mistake (Quality of the person, Quality of the property.)

6.) Fraud- A declaration is voidable.7.) Duress- A declaration is voidable.

Void and Voidable Acts

• Void Acts - When act is void, there is not legal effect between the parties concerned - Act which object is expressly prohibited by law, or is impossible, or is contrary to public order, or good moral. - An act of which is not in the form prescribed by law. - An act which done when express intention differs from hidden intention - An act which is done with fictitious declaration of intention - An act which is done in order to conceal another real act - An act which is done under mistake as to the essential element of the juristic act.

• Consequences of void act - A void ach has no legal effect - A void act cannot be ratified - When part of an act is void the whole act is void, except that it may be valid if it may be assumed under the circumstances of the case that the parties intended the valid part of the act to be separated from the invalid part. - If an act which is void satisfies the requirements of another act, the act is interpreted as if it were a transaction of the latter kind the parties would have , provided it can be assumed that the parties would have concluded the latter transaction if they had known that the transaction originally intended was void - A void act can be alleged by any interested person - A void act can be alleged at any time.

• Voidable act - Voidable act is valid until it is avoided by the person specified by law - The acts become voidable in the following circumstances: - Act which is done without proper capacity of a person - Act which is done under fraud - An act which is done under duress

Formation of a contract

4.2.1 Formation of a contract

In general, a contract is a mutual consent made

between the parties of a contract

The first party

Offeror

Proposal to enter into the contract

Offeree

The second party

Agrees to make the contract by making an acceptance to meet with the offer

Formation of a

contract

Offer

Definition of an offer

An offer is a proposition made by a person (called the offeror) to another person (called the offeree) to enter into a legally binding contract

The characteristics of offer(1) An offer must be clear and certain(2) An offer can be made either to a specific

person or to public at large(3) An offer can be made to person who is

present or can be made to a person at a distance

Legal effect of the offer

An offer takes effect upon the offeror differently. This depends on how it was made.

Binding force of offerAn offer is a kind of unilateral juristic act.

This creates a juristic relation to a person who makes an offer.

An offer ceases to be binding

An offer ceases to be binding in the following cases:

(1) It is refused by the other party(2) It is not accepted within the specified

period(3) It is not accepted within a reasonable time(4) It is not accepted there and then

Acceptance

• Acceptance means accepting the offer by the party to whom an offer is made

Legal principals concerning acceptance

1. It can be withdraw so far as it has not reached the offerce .

2. The acceptance must correspond to the offer

3. The time in which an acceptance must be made 3.1 If the period for acceptance is specified, the

acceptance must be made within such period. 3.2 If the period for acceptance is not specified,

the acceptance must be made within the reasonable time.

3.3 If the offer is made to a person who is present and there is no specified period for acceptance, the acceptance must be made there and then.

4. The acceptance arrives out of time.5. An acceptance arrives out time, but still

enforceable.

Conclusion of contract

• We will focus on :1. A contract made to a person who is present.2. A contract made between the offeror and the

offerce who are at a distance. -4 steps expressing the intention

motivation -> thought -> inside intension -> expression intension

A contract made to a person who is present

• Section 356 provides that – An offer made to a person who is present without

specifying a period for acceptance may be accepted only there and then.

A contract made between the offeror and the offerce who are at a distance

• Section 361 provides that– A contract between person at a distance comes into

existence at the time when the notice of acceptance reaches the offeror.• Often used by post, mail.– For solid evidence.