Summary BBE_503___INTRO_TO_LAW_OF_CONTRACTS

BBE 503: THE LAW OF CONTRACT

INTRODUCTION AND OBJECTIVE

A contract may be defined as a legally binding agreement
made by 2 or more parties.

The objective of this part of the course is to provide the

student with a broad understanding of the
following concepts pertaining to the Law of Contract;

 The nature of a contract.

 Formation of a contract.

 Classification of Contracts.

 Terms of contract; Exemption clauses, conditions and
warranties.

 Vitiating factors; mistake, misrepresentation, duress and
undue influence.

 Privity of contract.

 Termination and discharge of a contract.

 Remedies for breach of contract.

 Limitations of actions.

KEY DEFINITIONS:

 Offer: an unequivocal and clear manifestation by one
party of its intention to contract with another.



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, Unequivocal: clear, definite and without doubt

 Invitation to treat: This is a mere invitation by a party
to another or others to make offers or bargains. The

invitee becomes the offeror and the invitor becomes

the offeree. A positive response to an invitation to treat
is an offer.

 Acceptance: This is the external manifestation of assent
by the offeree.

 Revocation: This is the withdrawal of the offer by the
offeror.

 Consideration: It has been defined as “an act or promise
offered by the one party and accepted by the other party
as price for that others promise.”

 Estoppel: It a doctrine that is to the effect that where
parties have a legal relationship and one of them makes a
new promise or representation intended to affect their
legal relations and to be relied upon by the other, once
the other has relied upon it and changed his legal
position, the other party cannot be heard to say that
their legal relationship was different.

 Conditions: This is a term of major stipulation in a
contract. If a condition is breached, it entitles the
innocent party to treat the contract as repudiated and to
sue in damages.

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, Warranties: This is a minor term of a contract or a term
of minor stipulation. If breached, it entitles the innocent
party to sue in damages only as the contract remains
enforceable and both parties are bound to honour their
part of the bargain.

 Merchantable quality: Fit to be offered for sale.
Reasonably fit for the buyer’s purposes

 Privity of contract: This doctrine is to the effect that
only a person who is party to a contract can sue or be
sued on it.

 Void: Lacking legal force.

 Voidable: Capable of being rescinded or voided.

 Caveat emptor: It literally means “buyer beware” This is
a Common Law principle to the effect that in the absence
of fraud or misinterpretation, the seller is not liable if the
goods sold do not have the qualities the buyer expected
them to have.

 Quantum meruit: This literally means “as much as is
earned or deserved”. This is compensation for work
done. The plaintiff is paid for the proportion of the task
completed.

 Breach of contract: A failure to perform some promised
act or obligation




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,  Frustration of contract: A contract is said to be
frustrated when performance of the obligations becomes
impossible, illegal or commercially useless by reason of
extraneous circumstances for which neither party is to
blame.

 Damages: it is a monetary award by court to compensate
the plaintiff for the loss occasioned by the breach of
contract.

 Ex-gratia Sum: - a free-sum, one not required to be
made by a legal duty

 Unilateral Mistake: This is a mistake as to the identity
of one of the parties to the contract. Only one party is
mistaken and the mistake is induced by the other party.

 Misrepresentation: This is a false representation. It is a
false statement made by a party to induce another to
enter a contractual relationship.

 Duress: - actual violence or threats thereof



CONTEXT

Whether we know it or not

we all contract at some point in time in one
way or another.
We all contract whether consciously or sub consciously. The
bulk of the day to day contracts we make do not have all the

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