1. CONTRACT AND OTHER AGREEMENTS  Social arrangements and business agreement  elements of valid contract

2. SOCIAL ARRANGEMENTS AND BUSINESS AGREEMENT  So in a contract, a person should know the obligation he is going to carryout and the benefit he is going to get / or lose. Knowledge is not enough, he should also agree to such obligation/ benefit. Agreement is not still enough. The person should also agree that if he fails to meet his obligation as agreed the state machinery may be used to force him to carry out his obligation.

3. NON-BINDING AGREEMENTS  Social or domestic arrangements or agreements, usually made between friends or family members (a father’s promise to take his son to a concert); and  business or commercial agreements which totally exclude those agreements which are ‘social’ or ‘domestic’ in nature.

4. NON-BINDING AGREEMENTS  Mere domestic or social agreements are not usually intended to be binding and, therefore, are not contracts. E.g. A father told his son that he (father) will reward 200 USD if the son scores 80% in his first semester exam.

5. A BINDING CONTRACT  A binding contract is usually in the nature of a commercial bargain, involving some exchange of goods or service for a price. In considering whether sufficient intention to create a binding contract is present; two situations are possible: A. Where the parties expressed by denying the intention (for commercial agreement). e.g. A written commercial agreements described itself merely as an “honorable pledge and stated expressly that it was not “to be subject to the jurisdiction of any court. B. Where the parties do not expressly deny intention to create legal relation. It is in each case a question of construction for court to decide as to whether a contract is intended.

6. ELEMENTS OF VALID CONTRACT  Consent of the parties (offer and acceptance) art.88-128  lawful object art. 159-133  Lawful motive art.134

7. CONSENT OF THE PARTIES Art.88-128  Consent is a declaration of intention to be bound by an obligation. A person has to express his willingness to create an obligation on himself, or give up some or all of his proprietary rights.  Consent is expressed either in the form of offer or acceptance Offer and acceptance are ways of communicating one’s own intention to be bound by an obligation. Therefore; offer or acceptance is declared to another person by ordinary ways of communication.These ways of communication are oral, written, signal and conduct.

8. OFFER  When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other person either to such act or abstinence, he is said to make a proposal.  Moreover, offer contains the intention of the person making it to be bound by the content of the offer. In short offer contains three important elements: 1.the content of the contract, 2.the agreement of an offeror to be bound and; 3. request of the offeror to the offeree to be bound by the offer.

9. OFFER …  The offeror has autonomy to choose any of the four ways of communication (Oral, written, signal and conduct). He /she may even choose the ways that the offeree shall use to give a response. So Offer may be made in writing, orally, or by signs or conduct. 1. Written declaration of offer is when all the elements of offer are reduced in writing on a paper or electronics and delivered to the offeree. 2. Oral commutation of an offer is when the offeror uses voice to tell to the offeree the contents of the offer and the offeree uses hearing (ears) to know what the offeror is communicating to him. So using telephone, telegram e.t.c to communicate an offer is oral communication of offer.

10. OFFER … 3. Signal communication is of two types: gesture and object placed to give information. Gesture is one of the four ways of communication. Mute or/and deaf people use such way of communication. Such person makes an offer by using signal communication. Nodding head, shaking hands and hammering down in an auction sale are also communication by gesture. Objects may also be used to express an intention. For example in a commodity exchange market, objects are utilized to indicate intention to be bound. 4. Communication of offer by conduct is when the offeror performs partly or wholly the obligation that he will perform if the contract is entered into.

11. OFFER OR INVITATION TO TREAT?  The formation of an agreement is usually the result of an offer being made by one party (the offeror) to another party, (the offeree). An unconditional acceptance by the latter is needed if a contract is to be formed. An example of this process is when the offeror tenders money at the check-out counter of a supermarket in exchange for certain goods he/she wishes to purchase. This raises consideration of the distinction between an offer and an invitation to treat (that is, an invitation to make an offer).  Therefore, if a person “does not make his intention known to the beneficiary of the declaration” such declaration shall not be taken as an offer.

12. LAPSE OF AN OFFER  An offer should be accepted before it lapses (i.e. comes to an end). An offer may come to an end in any of the following ways: 1.By communication of notice of revocation: An offer may come to an end by communication of notice of revocation by the offeror. 2.By lapse of time; Where time is fixed for the acceptance of the offer, and it is not acceptance within the fixed time, the offer comes to an end automatically on the expiry of fixed time. 3.By the death or insanity of the offeror: Where, the offeror dies or becomes, insane, the offer comes to an end if the fact of his death or insanity comes to the knowledge of the acceptor before he makes his acceptance.

13. LAPSE OF AN OFFER…  An offer should be accepted before it lapses (i.e. comes to an end). An offer may come to an end in any of the following ways: 4. By counter – offer by the offeree: Where, a counter – offer is made by the offeree, and then the original offer automatically comes to an end, as the counter – offer amounts to rejections of the original offer. 5. By rejection of offer by the offeree: Where, the offeree rejects the offer, the offer comes to an end. 6. By change in law: Sometimes, there is a change in law which makes the offer illegal or incapable of performance. In such cases also, the offer comes to an end.

14. ACCEPTANCE When the person to whom the proposal is made, signifies his assent thereto, the proposal is said to be accepted. Art.90 civil code Acceptance is a positive response to an offer i.e. it is a declaration of intention to be bound by each and every contents of an offer. In short acceptance is a “Yes” answer to all the contents of the offer. Any slightest modification made to the content of the offer is considered as rejecting the offer and making, an alternative offer

15. HOW ACCEPTANCE IS MADE Since acceptance is communication of intention, like an offer, it can be made in all possible ways of communication. So, the offeree can use writing, oral, sign or conduct as means of communication. The medium of communication never matters. The offeree may use letter, press, telex, email, etc to communicate his acceptance in writing. He may also use telephone, telegram, video, radio, television etc as a medium of oral communication. Signal communication is showing certain publicly known physical gesture such as shaking the hand of the offeror, nodding head or using certain objects publicly used to indicate intention. Signal communication usually requires the physical presence of both the offeror and the offeree at the same time and at the same place.

16. HOW ACCEPTANCE IS MADE  Communication of acceptance by conduct means performing partly or fully the obligation proposed by the offer or benefiting from the rights proposed by the offeror.

17. HOW ACCEPTANCE IS MADE The offeree does not have a duty to give response to the proposal of the offeror. He can respond negatively or positively only if he wants to respond otherwise he may for example read an offer and simply throw it in a dust basket or tear it off by reading only the address of the letter. That means the offeree has the right to remain silent; no one is allowed to disturb his peace. Moreover; if the offeree remains silent there is no assurance that the offer was brought to his attention; he might have not known the existence of offer. Therefore silence shall not amount to acceptance It should not be taken as a signal indication of acceptance.

18. HOW ACCEPTANCE IS MADE However, in the following cases the offeree has a duty to respond a “no” answer if he does not want to be bound by an offer, otherwise his silence may be taken as a sign of acceptance by the offeror. A. Duty to accept: - sometimes a law or contract may impose on the offeree the obligation to accept offers made to it. This is mainly when the offeree is a monopoly supplier of goods or provider of services. Some public enterprises are established by law to provide goods and services to the public, hence they are duty bound to accept an offer from the public.

19. HOW ACCEPTANCE IS MADE B.Preexisting Contractual Relation art.97 Silence may also amount to acceptance where 1)Where offeree agrees that non – refusal by him within specified time shall amount to acceptance of offer. 2)When there is custom or usage of trade which specified that silence shall amount to acceptance. 3)the content of the offer is to vary, supplement or complement preexisting contractual relation 4)the offer is made in writing 5)the offer should be written on special document 6)The offer contains warning that silence amounts to acceptance.

20. EFFECT OF ACCEPTANCE Acceptance becomes effective from the moment the offeree sends it to the offeror. Here it is not from the moment an offeree writes a letter of acceptance but from the moment he put it in a post office or if it is email, from the moment he clicks the “send” button of his email box. Therefore; the consent element of contract is fulfilled at the moment the offeree accepts the offer regardless of the knowledge of the offeror. Art.92 However; the acceptance must reach the offeror or his heirs before expiry of time limit specified in the offer or reasonable period. If the acceptance does not reach the offeror cannot know whether or not contract is concluded between him and offeree.

21. QUESTIONS??? Comments!!!