1. NAGY, Csongor István ncsi@eik.bme.hu
Contracts Class 5
NAGY, Csongor István

2. Agreement: offer + acceptance
James to Jerry: Offer
Jerry to James: Counter-offer (yes, but = new offer)
James to Jerry: Acceptance

3. Rights if the other party breaches the contract
If performance is refused: you may sue for specific performance (but in common law you may sue only for damages)
If the goods are defective: reparation, replacement, reduction in price.
If you are not interested in the performance of the contract due to the breach: you may cancel the contract.
In all cases, you have a right to claim damages, provided, you have suffered any.

4. Specific types of contract
Sales contract
Lease contract/Leasing
Factoring
Distribution agreement
Franchising

5. Sales contract Seller: Buyer (purchaser):
transfer of title (ownership)
handing over the thing
Buyer (purchaser):
pay the price
take the goods

6. Lease agreement US: simple lease. Europe: lease + sale. Rationale:
financing of durable goods/assets;
security;
tax considerations.

7. Factoring ‘Sale of claims’ Financing method Collection service
Can the money be collected from the original obigee if the debtor does not pay?

8. Distribution agreements
Framework (sales) contract
Mandate agreement
The distributor has to take all the reasonable measures to promote the goods.
Sole distributor, exclusive distributor, non-exclusive distributor.
Selective distributors.

9. Franchising ‘Resale’ of knowledge
It normally involves distribution elements
The franchisor gives a franchise (persmission) to the franchisee to use the franchisor’s trademark, knowhow, patents etc.
Examples: fastfood restaurants, gas-stations, hotels/hostels.