Introduction to the law of contract

Here is a brief summary of the law of contract. Complete the texts using the words in the box.

agreement breach capacity consideration damages fraud illegal obligation oral performance property signed terms

What is a contract?

It is an agreement that creates a binding (1) obligation upon the parties. The essentials of a contract are as follows: mutual (2) …………….; a legal (3) …………….., which in most instances need not be financial; parties who have legal (4)………….. to make a contract; absence of (5) ………….or duress; and a subject matter that is not (6)………………or against public policy.

What form does a contract take?

In general, contracts may be either (7) …………….or written. Certain types of contracts, however, in order to be enforceable, must be written and (8) …………… These include contracts involving the sale and transfer of (9) …………

How does a contract end?

In case of a (10) …………..of contract, the injured party may go to court to sue for financial compensation (or (11) ……………), or for rescission, for injunction, or for specific performance if financial compensation would not compensate for the breach. Specific (12) ………….of a contract is the right by one contracting party to have the other contracting party perform the contract according to the precise (13) ………. agreed.

Types of legal contracts

Link the type of contract to its description.

Type	Description
	Consultancy agreement	a	This agreement is used to ensure the repayment of money borrowed, usually in monthly instalments.
	Distribution agreement	b	This agreement is used where one party buys goods from the manufacturer and re-sells them on his own account. He will however be given the right to use the manufacturer's intellectual property rights.
	Franchise agreement	c	This agreement sets out the terms and conditions on which a business supplies goods.
	Loan agreement	d	This agreement is used where one party grants to another the right to run a business in the name of the first party. Examples include Body Shop and McDonalds.
	Manufacturing licence agreement	e	This is the equivalent of a contract of employment for directors.
	Terms and conditions of sale agreement	f	This agreement is used where one party is providing services as an independent advisor to a company.
	Contract of employment	g	This agreement should be used where one party (the licensor) owns intellectual property rights in respect of a product it has developed and wishes to license the manufacture of the product to a third party.
	Directors' service agreement	h	This is intended to govern the relationship between a number of shareholders in a company. The agreement works as a second.' layer of protection preventing the company from being run in a manner other than has been agreed.
	Shareholders' agreement	i	This contract comes into existence as soon as a job offer is accepted whether that offer is oral or in writing.

Date: 2015-01-12; view: 2980

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