1. Contract

2. Introduction The definition of a contract Contract v. agreement
Requirements for a valid contract
Void and voidable contracts
Unenforceable contracts
Breach of contract
Damages

3. Contract
A legally binding agreement between two or more parties which the court will enforce
Agreement – an exchange of promises; not every agreement is a contract
Contract – a legally enforceable agreement – the agreement that generates rights and obligations that may be enforced in the courts

4. Contract and agreement
The law does two things in transforming an agreement into an enforceable contract:
1. It determines whether the contract meets all the requirements of the law
2. The law, and not the contracting parties, has the final say on whether there is a contractual obligation and what the scope of the obligation is

5. Express and implied terms
Express terms: what the parties said or wrote
Implied terms: terms that have not been agreed by the parties, but the law makes them part of the contract anyway

6. Requirements for a valid contract
The parties must possess legal capacity to enter contract
One party must have made a binding offer, and the other one has to accept it
The contract must be supported by consideration
The resulting agreement must have been a genuine one
Some contracts must be made in a particular form
The object of the contract must not be disapproved of by the law

7. Legal capacity Parties must be competent
Natural persons: age of majority (consent), mental capacity
Legal persons: properly registered companies

8. Offer and acceptance
One party must have made a binding offer to the other, and the offer must have been accepted
Such an offer must be binding; parties must accept legal consequences.
In legal terminology, an offer is a statement of willingness by the offeror to enter into a contract if the other party accepts all the terms of the offer

9. Consideration
Every contract must be supported by consideration (the court only enforces a bargain, not a one-sided promise).
The doctrine of consideration: any promise not supported by consideration is unenforceable.
If the party that makes a promise gets nothing in return, the contract is unenforceable: each party must benefit.

10. Genuine agreement The resulting agreement must have been a genuine one
The contract must reflect the actual exchange of promises, not a false one

11. Contracts in particular form
In certain exceptional cases, the contract must have been made in a particular form
Marriage
Contracts which must be in writing: a transfer of shares, an assignment of copyright, a contract to pay someone else’s debt...
To enforce one of these contracts, a claimant must produce a writing signed by the other party that contains evidence of the contract

12. The object of the contract
The object of a contract must be approved of by the law
- f.e. “to take a contract on the rival” is not a contract in law
Such an agreement is not legally enforceable

13. Void contracts Any contract that lacks one of essential requirements
It does not give rise to any legal rights or duties
It does not exist as far as the law is concerned

14. Voidable contracts
Valid to start with, but may be avoided at the option of one of the parties
A contract affected by a flaw (fraud, duress, misrepresentation, undue influence)
F.e. The doctrine of duress allows a party to get out of a contract when he was forced to enter into contract by threats from the other party

15. Unenforceable contracts
Contract that is valid in all respects, but cannot be enforced by an action in law because the party wishing to enforce it lacks some kind of evidence (evidence in writing)

16. Breach of contract
Contract typically creates an obligation to do or avoid doing something, or to pay a sum of money
Breach of contract is the refusal or failure by a party to a contract to perform an obligation imposed on them under the contract
If one party does not do what they have promised to do, they are in breach of contract

17. Legal remedy
The injured party is entitled to a legal remedy

18. Remedies for breach of contract
Equitable remedies:
quantum meruit, ‘as much as he deserves’ – for partial performance;
Specific performance – an order to make a party perform his obligatons under the contract
Injunction – a court order to stop someone breaching a term of the contract

19. Damages
The aim of damages in contract law is to put the claimant in the position he would have been in if the contract had been performed properly
Damages are designed to compensate for the loss one has suffered
Expectation damages
Unliquidated damages – the court decides how much will be awarded in damages
Liquidated damages – parties decide in advance

20. Vocabulary Binding agreement – obvezujući sporazum
Contracting parties – ugovorne strane
Natural person – fizička osoba
Legal person – pravna osoba
Valid contract – valjani ugovor
Void contract – ništav (ništetan) ugovor
Voidable contract – pobojan (poništiv) ugovor
Copyright – autorsko pravo
Breach of contract – raskid ugovora

21. Vocabulary revision
Fill in the blanks with the most appropriate words from the list below:
consideration, sue, obligation, illegal, breach, fraud, mutual, capacity
A contract is an agreement that creates a binding _________________ upon the parties. The essentials of a contract are as follows: _________________ agreement, a legal ________________, which need not be financial; parties who have legal ________________ to make a contract; absence of __________ or duress; and a subject matter that is not __________________ or against public policy.
In case of a _____________ of contract, the injured party may go to court to __________ for damages, for injunction, or for specific performance if financial compensation would not compensate for the breach.

22. Answer key
A contract is an agreement that creates a binding obligation upon the parties. The essentials of a contract are as follows: mutual agreement, a legal consideration, which need not be financial; parties who have legal capacity to make a contract; absence of fraud or duress; and a subject matter that is not illegal or against public policy.
In case of a breach of contract, the injured party may go to court to sue for damages, for injunction, or for specific performance if financial compensation would not compensate for the breach.

23. Frustration of a contract Repudiation of a contract Arbitration
Explain the following terms and find their Croatian equivalents (video vocab):
Frustration of a contract
Repudiation of a contract
Arbitration
Consideration
Representation / misrepresentation
To settle a dispute
To award damages

24. Video Vocab

25. Frustration of a contract – prestanak važenja ugovora; nemogućnost izvršenja ugovora
Repudiation of a contract – odbacivanje ugovora; nepriznavanje postojanja ugovora
Arbitration - arbitraža
Consideration – protučinidba (naknada)
Representation / misrepresentation – predstavljanje, lažno (krivo) predstavljanje
To settle a dispute – riješiti spor
To award damages – dodijeliti odštetu

26. Translate the following:
According to the definition, void contracts are those that do not give rise to legal effects they would if they were not void. Voidable contracts give rise to legal effects as valid ones, but if they are set aside within the legally prescribed period of time, it is considered that there was no such legal effects. Void contracts are primarily those that do not conform with the Constitution or social morality, which is a wide formulation that, particularly in the part about morality, covers a lot.

27. Suggested translation:
Prema definiciji ništetni su oni ugovori koji ne proizvode pravne učinke koje bi imali da nisu ništetni. Pobojni su oni ugovori koji proizvode pravne učinke kao da je sve u redu, ali, ako u zakonskom roku budu poništeni, smatra se da tih učinaka nije ni bilo.
Ništetni su ugovori prije svega oni koji su protivni Ustavu ili moralu društva, što je dosta široka formulacija pod koju se, posebno u dijelu o moralu, mnogo toga može podvesti.

28. Thank you for your attention!