Chapter 15: The Binding Force of Contract

Question 1

The right to withdrawal (definition) (hint: 30 days renewal policy)

Answer 1

The right to withdrawal is granted, for example in the case of 30 days return policy. In some cases, failure to withdrawal implies automatic renewal.

Question 2

Integration (definition)

Answer 2

Incomplete contracts call for integration.

Question 3

Objective interpretation of contracts

Answer 3

Interpretation of contracts must be objective (consider context, not the intended meaning of parties).

Question 4

Contingency (definition)

Answer 4

Contingency is the future event/condition which triggers an obligation.

Question 5

The power of attorney (definition) (hint: agent)

Answer 5

The power of attorney is the act by which power of representation is granted to an agent.

Question 6

Conditions for a contract to have legal effect on the principal (and not the agent)

Answer 6

A contract entered into by an agent has direct legal effect on the principal of the agent acts in the name, in the interests and within the limits conferred to him by the principal.

Question 7

Sham contracts (definition)

Answer 7

Sham contracts is when declarations and will may be deliberately divergent.

Question 8

Fiduciary agreement (definition)

Answer 8

Fiduciary agreement are contracts where a person transfers ownership of an asset to a fiduciary.