1. LEGAL ACTS

2. LEGAL ACT Means establishing, amending or abolishing legal rights
Unilateral or bilateral
Generally binding

3. CONTRACTS

4. MAIN PRINCIPLES Freedom of contract
As regards the form, contents, parties of the contract
As regards the decision to make a contract
Contract is enforceable as agreed => BINDING
no second thoughts unless there is a reason for invalidity
Assumption of good faith
Bona fide / mala fide
Contracts Act 228/1929

5. GOOD FAITH One is in good faith (bona fide) if one
Did not know
and
Should not have known
about the circumstances
Assumption of good faith
Burden of proof is with the one who claims that the other was not in good faith

6. CASE
In a shop, Paula saw a lovely Canadian Goose down jacket at €5. She decided to buy it but the shop assistant refused to sell it at €5 saying that there was a mistake.
Isn’t the price tag binding to
the shop?

7. TYPES OF CONTRACT Contract between two parties – several parties
Single performance contract – continuous performance contract
Undefined term – defined term
B to B contract – B to C contract
Written contract – orally agreed contract

8. CASE
When wandering in the market place, Ville saw in a stall a charming water color painting for sale. He asked for the price, and the seller promised the painting at the cheap price of 100 € because he was just in the need of money. Ville got excited about the good price and ran home to ask for his girlfriend’s opinion.
When Ville and his girlfriend came back to the market after one hour to see the painting, the seller had raised the price to € 150. Ville got furious, and he demanded the painting for 100 €, referring to the contract they already had made.
Who was right?

9. FORMATION OF A CONTRACT
OFFER +
ACCEPTANCE =
CONTRACT

10. CASE Anna is willing to sell her computer to Matti at €400.
What consequences are there for the alternative situations:
A) Matti agrees
B) Matti doesn’t answer because he wants to think about it
C) Matti would like to buy the computer but at €380?

11. specifically adressed
OFFER
valid,
detailed and
specifically adressed 1 3
ACCEPTANCE
on time
and
In accordance with
the terms of the offer
REPLY
delayed or
modified 2
REFUSAL
COUNTER
OFFER
CONTRACT
OFFER
LAPSES

12. CASE
A retailer offers a shopkeeper 50 pairs of canvas shoes at the price of € 10/pair. Due to high demand, the retailer soon regrets the cheap price he has set for the shoes and wishes he could amend his offer. Can he revocate the offer or is it binding to him?

13. TIMELINESS AND CONTRACT FORMATION
OFFER COMES TO
THE ATTENTION
OF THE OFFEREE
ACCEPTANCE
IS DISPATCHED
ACCEPTANCE COMES
TO THE ATTENTION
OF THE OFFEROR
OFFER IS
DISPATCHED
Acceptance may
be revoked
Offer may be revoked
Acceptance
becomes
binding
CONTRACT
IS CONCLUDED
Offer becomes
binding
Modified from: Richards, E Law for global Business. Irwin, USA

14. CASES
Mr. Black wants Mr. White to paint his kitchen walls on Christmas morning and he forces Mr. White to sign a contract on it. Will Mr. White have to comply with the contract?
A shopkeeper tells the customer that ”these shoes are not available anywhere else” and the customer buys the shoes. However, she soon finds the same kind of shoes in another shop at a cheaper price. Can she get her money back?

15. INVALIDITY OF A CONTRACT
Nullity
Contract is originally invalid, null and void
Voidability (contestability)
Contract becomes valid after a stipulated period of time unless contested within this time
Invalidity based on objection
Contract remains valid, unless one of the parties makes a plea (allegation) objecting its validity

16. STRONG GROUNDS FOR INVALIDITY
Can be objected even if the other party of the transaction was in good faith
Grave duress (28§)
When a person has been coerced to a transaction into which a person has been coerced with physical violence or a threat involving imminent danger to life or health
In case the coercion was exercised by a third person and the person to whom the transaction was directed was in good faith, the coerced party shall, if he/she wants to invoke the said coercion in relation to the other party, without undue delay after the coercion has ceased notify that party thereof at the risk of the transaction otherwise becoming binding

17. WEAK GROUNDS FOR INVALIDITY
Can be objected only in case the other party is not in good faith
Mild duress (29§)
Coercion by other means than physical violence or a threat involving imminent danger to life or health
Fraud inducement (30§)
Undue influence (31§)
Advantage is taken of another’s distress, lack of understanding, imprudence or position of dependence on him/her and benefit obviously disproportionate has been acquired or for which there is to be no consideration
Mistake in utterance (32.1§)
Circumstances incompatible with honour and good faith (33§)
Simulated transaction (34§)
Main general clause and adjustment (36§)

18. WHO HAS RIGHT OF PLEA Both parties The mortified party A third party
In case the invalidity reason is to protect public interest
The mortified party
When the invalidity reason is to protect that party
A third party
When the invalidity endangeres his / her rights