Chapter 4, The Law of Contract
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What are the three type of rules relevant to contract law ?
1) Rules that are made by the contracting parties themselves
2) Rules that emerge from the official national, European and supranational sources
3) Informal Rules that are made by others
What are the 2 caracteristics of rules that are made by the contracting parties ?
1) Freedom of contract. Parties are free to decide whether they want to contract at all and with whom, but they can also determine the contents of their contract
2) General conditions. To standardised set of rules that are suited to their own interests.
What are the characteristic of rules that emerged from official national, European and supranational sources?
1) default and mandatory rules are set.
Who produces national rules ?
At the national level, the official contract law is produced by the legislature and the courts.
What is informal rule ?
Soft law. Rules that are not officially binding but have the status of soft law.
Formation of a binding contract.
1) From a promise to a binding contract (3)
No legal system allows all promises to be enforceable. So, what the criterion is for the legal enforceability of promises :
Intention to be legally bound : the intention of the parties to enter into a legal relationship.
Gratuitous promises : A purely gratuitous promise (a donation) usually need to be put in a notarial deed.
Consideration : requires that there is a qui pro quo, the promise must be given for a counterperformance by the other party.
2) Offer and Acceptance
If an acceptance has been dispatched by the offeree the contract is concluded when the acceptance reaches the offeror.
How are the weaker parties protected ?
1) Consumer protection : put the contract in writing and the need to comply with information duties.
2) Withdrawal Rights : allow the cancellation of a contract without any reason, consumer only need to return the good or send the seller a notice of cancellation within the "cooling-off period".
3) Incapacity : certain persons are incapable of entering into anlegal transactions at all. (Young children and the mentally ill)
How is interpreted a contract ?
The contract is interpreted in the way in which a reasonable person would understand it.
When is a contract prohibited ?
If they are contrary to law, public order and morality.
What is nonperformance ?
When the other party is nonperforming at all, is performing too late (delay) or is performing in the wrong way. (Defective performance)
What is the position of civil law for performance ?
If a party does not perform, it can be forced to do so by a court.
A case of objective impossibility
when performance requires specific personal qualities
when performance would cause the debtor unreasonable effort or expense
What us the position of common law on performance ?
The normal action is for damages, so-called specific performance being the exception.
What happen if the performance of the contract does not take place at all, is too late or defective, in the common law ?
To hold the nonperforming party liable simply because it did not perform, the wrong party must compensate its customers.
What happen if the performance of a contract does not take place, is too late or defective, in the civil law ?
Allow a claim for damages only if he other party was at fault or can at least be held responsible for the nonperformance. (Excuse of force majeur are accepted)
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