Contract law FROM TRUST TO PROMISE TO CONTRACT

BASICS AND I NS IGHT OVERVIEW

What is ContractAn Agreement creating obligations enforceable by law.

The basic elements of contract are:

Mutual AscentConsideration

Capacity

And legality

What is the purpose of Contract Law

Contract law is the body of civil law dealing with interpretation and enforcement of written agreements between parties.

However A Contracts does not have to be in writing in order to be binding

Building a ladder of trustCoordination between Voluntary Parties

There has to be:

Communication, Agreement, Understanding, and Trust

What is trust?

A crucial notion that is going to underlie everything we're talking about. That's trust.

Principles: Offer & Acceptance

OffereeOfferor

Third party beneficiary

promiseePromisor

Offer & Acceptance I offer my

apartment for 500$ per month

OK DEAL!Here is 500$

What is an empty bagThere are conversations, dealings, which looks like bargains, but when you think about them carefully, they're not bargains at all.

Here's an example, quite a common one. A one Side promise or promises that looks like binding but they are not.

Example:

A Big company contracted with supplier to buy a specific good at a index price when ever they needed it.

Can we see What is this bargain looks like?

What makes an enforceable contractThe four principles:

First one: intend to have a legal relations:

Family, friend promises are not considered as a pounding contract unless it is super serious from both Parties.

Second one: Serious sides:

If the promises considered as frolic this does not considered as a Contract.

Third one: Morals and ethics

Must be considered in Contracts. An immoral situation are not considered as a pounding Contract at Court. Another side of the third principle is that promise for a Gift genuinely and/ or an unserious promise.

Fourth one: Gift or bargain:

Not in Common Law the Court is to enforce promise of Gift neither enforcing bargains.

What Doesn’t make an enforceable Contract

Frustration

• Krell v. Henry

Fraud

• Raffles v Wichelhaus

Mistake

• Rose the cow: Sherwood v. Walker

Interpretation of Contract

Interpretation is everywhere. It’s present in an ordinary conversations.

It presents in trying to understand Koran, Bible, poem, even in interpretation of play by SHAKESPEARS and also in constitution for people to keep and bear arms.

Interpretation is act of explaining reframing or otherwise showing your own Understanding of something.

CodingSender ReceiverDecodingMedia

How do court interpret the contract

under English law

Remedies and Specific performance when we do have a contract and one of the parties breaks his/her promise,

when there's what's called a breach of contract. We've said that a contract is a promise the government will stand behind.

The government, the courts, have ways of making people do things they ought to do, or to respond when they don't want to do what they ought.

Most forcefully and directly, a court can order someone to keep his promise and to threaten to put him in jail if he doesn't do it. That is called specific performance.

ORThe court can do something else,

and that's what usually happens in the case of a broken contract.

It doesn't order the contract breaker to keep his promise.

Instead, it orders him to pay the victim of the breach a sum of money.

And why is that?

what they do in the largest number of cases,

is not to force somebody to take any particular action.

What they prefer to do is to make the party in breach pay money.

RemediesPrinciple of Expectation Damages: You're entitled to the value of what you have been promised.

There are two ways to get here: cost of completion and Diminution of value.

Cost of completion (used by the court in Groves v. Wunder):

the cost of putting you in the position you would have been in, had the contract been fulfilled (an easy way to think about this is the cost of paying a third party to fulfill the obligations of the contract breacher).

Diminution of value (used by the court in Peevyhouse v. Garland):

is a legal term of art used when calculating damages in a legal dispute, and describes a measure of value lost due to a circumstance or set of circumstances that caused the loss

The difference in value between the state of affairs due to the contract breach and the state of affairs had the contract been completed .

Commercial impracticabilityWhat's Commercial impracticability:

Some times remedies with specific performance gets impracticable commercially.

A party to a contract may be relieved of his contractual obligations in the event such obligations have been made excessively expensive, harmful, or difficult to perform. If the parties cannot agree to change the terms of the contract, or to cancel the contract, it would become necessary to prove to a court the commercial impracticability of performing the specific obligations.

i.e.: Force Majeure

BONDS

Bonds

Bonds are the surety given to employer by the contractor (promisor) as to assure specific performance.

Performance bonds have been around since 2,750 BC. The Romans developed laws of surety around 150 AD,[3] the principles of which still exist.

Bonds:The Miller Act : codified as amended in Title 40 of the United States Code)[1] requires primecontractors on some government construction contracts to post bonds guaranteeing boththe performance of their contractual duties and the payment of their subcontractors andmaterial suppliers.

The Miller Act addresses two concerns that would otherwise exist in the performance of federalgovernment construction projects:

Bonds:Performance Bonds: The contractor's abandonment or other non-performance of a governmentjob may cause critical delays and added expense in the government procurement process. Thebonding process helps weed out irresponsible contractors while the bond itself defrays thegovernment's cost of substitute performance. The subrogation right of the bond surety againstthe contractor (i.e., the right to sue for indemnification) is a deterrent to non-performance.

Payment Bonds: Subcontractors and material suppliers would otherwise be reluctant to work onsuch projects (knowing that sovereign immunity prevents the establishment of a mechanic's lien)- decreasing competition and driving up construction costs.

The fact:It is often asserted that fraud is the only ground for restraining unfaircalls against on-demand performance bonds. Indeed, there is a viewthat it is extremely difficult to obtain injunctive relief in relation tounfair calls. This is not surprising given the high evidentiary burdenrequired to establish fraud.

THE END

REFRENCES

• CONTRACTX COURSE BY RITCHEL FRIED –HARVERDX & EDX

• WIKIPEDIA

• ASHURST LLP PUBLISHED PAPERS - INTERPRETATION OF CONTRACTS UNDER ENGLISH LAW

• LAWDICTIONARY.COM

• HTTP://LEGALDICTIONARY.NET/