The vast majority of obligations take the form of contract between
the parties, thus we will discuss formation of contract, what constitutes a
contract obligation and what does not.
Formation of a contrast :
The contract is the final outcome of an offer and acceptance, it
may be preceded by various negotiations, but there is no real contract unless
there is total agreement between the offer and acceptance and unless every
party complies with all the terms of the contract proposed.
A contract creates rights & liabilities. It may even be
considered a form of property, in that the rights & Liabilities resulting
from a contract can sometimes be transferred to third persons and may pass
involuntarily as a matter of law on the death or bankruptcy of the party
concemed.
Contracts may also give rise to obligations of trust as for
ex-duties of an excutor on payment certain fees & expenses or where one
person agreco to act as the agent of another.
A contract may produce consequences so far as the laws of tort is
concerned, since to procure a breach of contract (and possibly in modern times
to interfere with its proper performance or even to
prevent its being made). Is an actionable wrong. 30 Thus the
concept of contract is central in modern
law & the law of contract has very close ve relationships with
other branches of law.
A contract as stated before is the final outcome of total
agreement between offer and acceptance, here we discuss what forms an offer and
what constitutes an acceptance.
Offer:
Offer defined "an offer is the manifestation of willingness
to enter into a bargain, so made as to justify another person in understanding
that his assent to that bargain is invited and will conclude it "An offer
to be capable of acceptance, must involve a definite promise by the offerer
that he will bind himself if the exact terms specified by him are accepted. If
an offer takes the form of a promise in return for an act the performance of
the act in itself is an adequate indication of assent.
Acceptance :
Acceptance of an offer consists of a declaration communicated by
any means whatever it may be to the offerer. noy Acceptance may also consist of
the dispatch of the goods or of the price or of any other act which
the may be considered to be equivalent to declaration referred to
either by virtue of the offer or as a result of practices which the parties
have established between themselves or usage.
When does and acceptance operate to form a contract? the basic
rule is that the contract is formed by dispatch. The offerer may be allowed the
right to condition his offer. In particular he may provide that the contract
becomes effective only upon the double condition that the acceptance be
communicates to him and that he has not revoked the offer in the meantime. This
condition may be imposed upon the acceptor either by virute of the offer or as
a term of the conditional contract which is being created by dispatch of the
acceptance. the absence of a stepulation to the contrary, contract whether
inter presents or inter absents, is fouund at the time and at the place of the dispatch of the
acceptance. When the offer is accepted tacitly, the contract is considered
formed at the time and place where the acceptor received the offer.
Considération:
A promise not made by deed is not enforceable by action unless it
is made for valuable consideration.
If by deed promises to give $50 may enforce the promise. If by
word of mouth or in writing. A promises to give $ 20 cannot enforce the
promise. It is not and enforceable contract but a gratutitous promise. But
suppose A offers to pay B $ if B will in return deliver to A a certain horse,
then if B accepts the offer and delivers the horse A. is under a contractual
obligation to pay: over $50 in return. The delivery of the horse is said to be
the consideration for A's promise.
Consideration must be something of value which the promisee
contributes to the bargain, so as to bind the promisor to his promise. It is
not sufficient that the promisor is under some moral obligation to the promise
and that his promise is to fulfill that
obligation.
Nature of consideration :
A valuable consideration may consist either in some rights,
interest, profit or benefit accruing to the one party.or in some forbearance,
detriment, loss of responsibility given, suffered or undertaken by the other.
Contracts void & voidable :
A contract though valid may be annulled at the instance of a
parity who gives consent to it. On the ground of want of capacity. If he gives
it in mistake provided that the error was of the kind described here. If he was
induced to consent by deceit by the other party or to which such party was
privy. If he was coerced into the contact by duress or violence Mistake, dureas
or fraud are commonly spoken of as the vices of consent. It is likewise true
that a party to a contract cannot get it annulled on the ground of his fraud or
violence. In an Egyptian case, a wanted to borrow money from B. B. said he
would lend it only on condition that A signed a deea to a certain effect. A pretended
to sign, but instead of writing his name
he wrote in Hebrew letters which B could not read words equivalent to
declares he does not accept . It
was held that A was found in spite of his fraud. Yet the fact that the
obligation of one party is annulled on the ground that he did not give a valid
consent does not affect his validity on the obligations of the other party.
Acts voidable are valid at first
and produce legal effects, but are liable to be challenged and annulled.
Characteristics of void contracts
1. It can never produce any legal effect..
Thus when
its validity is inquired into by a
court, the court deoes not annul it, but simply declines to recognize its
existence.
2. Any person having an interest
may claim that the void contract produces no effect.
3. No confirmation by the parties
can gave validity to it
4. It cannot acquire validity by
prescription.
Characteristics of viodable
contracts:
1. Those made by an incapable person, unless his incapacity was
absolute as in the case of a lunatic or a baby.
2. Those made by an incapable
person, whose
consent was given in mistake, was
induced by fraud or was the effect of duress . The party protected has a right
to ask that it should be annulled under these rules.
3. The contract is perfectly valid
to begin with &
produces its legal effects.
4. The action to have it annulled
is competent only
to the party protected.
5. If the person who has the right
to attack the
cotract confirms it. It produces
its effect.
6. If the challenge is not made within
a certain
period the fight to challenge is
lost by prescription 10 years in the French code, but
according to general rules in
Egyptian 15 years. 7. If the contract is annulled the parties are put
back to the same position as if the
contract had never been made. This rule is subject to two
qualification in Egypt & France: a. When it is an incapable
person who gets the contract set aside
for his incapacity, he is liable only to account for so much as to have insured
to his benefit in consequence to the performance
of the contract..
b. The person who has received a thing under the tol contract and
possessed it in good faith does not need to account for the fruits.
Minors contracts :
The law governing infants contracts is based on two principles.
The first and more important is that the law must protect infants against their
inexperience. This makes it necessary to invalidate contracts which are unfair
to the infant or though in themselves fair are simply improvident e.g. (if the
infant for a fair price buys something that he cannot afford).
The second principle is that the law should not cause unnecessary
hardships to adults who deal fairly with infants. Under this principle certain
contracts with infants are valid others are voidable in the sense that they
bind the infant unless he repudiates & an infant may be under some
liability in tort , quasi-contract and if guilty of fraud in equity
At common law a person who spends
money in luying necessaries for an necessaries for an infant is entitled to
recover it form the infant. One who lends money to an infant cannot recover it
at law, but can in equity recover such part of the loan as was actually used by
the infant to discharge his liability for necessaries supplied to him. A
mortgage under seal to repay such a loan is ineffective since the infant is not
bound by his dead.
Performances are to be exchanged
under an exchange of promise if each promise is at least part of the
consideration for the other and the performance of the other comment.
Ordinarily when parties make such
an agreement, they not only regard the promises themselves as the subject of an
exchange, but they also intend that the performance of those promises shall
subsequently be exchanged for each other.
Performances need not be simultaneous. It is often expected that
performances will be exchanged under an exchange of promises were though these
performances are not to take place at the same time. Under a contract for the sale of goods. e.g the
parties expect an exchange of the delivery of the goods by the seller & the
payment of the price by the buyer regardless of whether the price is payable
before, at the same time as or after delivery of the goods.