Law of obligations & Contract Law

Question 1

What is a legal fact?

Answer 1

every fact to which the law accords legal consequences:
- Event: e.g. birth, death
- Condition: e.g. insanity
- Action / omission: e.g. causing an accident

Question 1

What are legal acts?

Answer 1

Every action (omission) which is deliberately taken considering the consequences accorded to it by law
- Unilateral: an offer, a resignation
- Multilateral: e.g. a contract

Question 2

Name four conditions for a valid legal act?

Answer 2

1. Consent
2. Object
3. Cause
4. Ability

Question 3

What is the condition consent for valid legal acts?

Answer 3

Free will or intention to be bound
The intention of a party to be legally bound is to be determined:
- From the party’s statements, conduct or omission
- As they were reasonably understood by the other party
- No vices: Absence of vices in the consent of a part case-by-case assessment

Question 4

What is the object condition for a valid legal act?

Answer 4

• Sufficiently defined or can be determined
• Which is permissible
• On the market

Question 5

What is ability as a condition for a valid legal act?

Answer 5

party must have the ability to take legal action / enter into an agreement

Question 6

What is the condition cause for a valid legal act?

Answer 6

the reason why you take action (legal act) or enter into an agreement
- Not contrary to public policy, and/or mandatory law

Question 7

What is the difference between legal and personal capacity?

Answer 7

• Legal capacity: to have the possibility to be the holder of subjective rights
• Personal capacity: to have the ability to exercise the rights of which one is the holder.

Question 8

Conditions for a mistake to be a vice?

Answer 8

• About the substance / core of the legal act/claim
• The essential element is known to or ought to have known by the other party
• Excusable = all other reasonable persons would have made the same mistake

Question 9

Name three types of vices?

Answer 9

1. Mistake
2. Fraud
3. Threats (of violence)

Question 10

What happens to a legal act if there are vices?

Answer 10

• Law sanctions parties if rules were breached upon the conclusion of a legal act

It can either be through avoidance or nullity of the legal act

Question 10

What are the characteristics of fraud as a vice?

Answer 10

• About the substance / core of the legal act/claim
• By the other party’s fraudulent representation, whether by words or conduct (common law), or fraudulent non-disclosure of any information
  Requires a fraudulent intention of the other party
• At the moment the legal act is concluded

Question 11

Name four characteristics of threats (or violence) as a vice?

Answer 11

• Towards myself or close relatives
• By the other party’s imminent and serious threat
• A threat which is wrongful in itself or to use
• At the moment the legal act is concluded.

Question 12

What is the difference between avoid and void in sanctioning legal acts?

Answer 12

Avoided we need to court the sentence the sanction
vs
void: vs it operates automatically

Question 13

What is meant with a retroactive effect of santions in case of vices, errors?

Answer 13

A retroactive effect means the legal act never existed (exchange/return what was already performed)

Question 14

Name four conditions for relative nullity:

Answer 14

• Sanctions acts which violate rules of mandatory law (rules which are installed to protect a certain (contracting) party and which cannot be set aside by the contracting party
• Only protected parties can invoke the sanction
• They have to invoke it at the beginning of dispute (at the first stages of going to court)
• Protective party is able to waive the vice upon certain conditions

Question 14

Name four characteristics of absolute nullity?

Answer 14

• Sanctions acts which violate rules of public order
• Everyone can invoke the sanction
• Even, at every stage of the dispute
• The sanction cannot be waived by the protected party, because the act was against the essence of our society, culture etc.

Question 15

What does waiving mean?

Answer 15

protected party sets aside the protection the law offers him. He doesn’t ask the court to apply the nullity-sanction. This causes the legal act to stand regardless of whether there was a vice, error, breach at the moment the act was concluded.

Question 15

Based on what conditions is the protective party in a legal act able to waive a vice?

Answer 15

1. The protected party is aware of the protection given to him by law
2. He is aware of this utterly at the moment he waives the sanctions
3. It has to be clear that he expressly waives the sanction to be applied

Question 16

Name three limits of freedom of contract?

Answer 16

• Rules relating to the validity of a contract
• General rule is freedom of contract: Where the otherwise applicable law so allows, the parties may choose to have their contract governed by their contract terms and thus set aside default rules provided by the law

Question 17

Based upon what conditions can a contract be governed by contract terms instead of default rules provided by the law?

Answer 17

effect should nevertheless be given to those mandatory rules of national, supranational and international law which, according to the relevant rules of private international law, are applicable.

Question 18

Name three rules relating to the validity of a contract limiting freedom of contract?

Answer 18

1. Consent
2. If required, fulfilment of formal requirements (we need a formal document to constitute a legal act (exceptional)
3. Personal capacity

Question 19

What is public order?

Answer 19

rule of law that constitutes the essential interests of a country or collective of people, or rule of private law that constitutes the legal framework on which the entire economic and/or moral order of that society, country, group of people is founded. It can never be waived

Question 20

What is the limit of public law?

Answer 20

Conflicting (fundamental) rights of others

No discrimination

Question 21

Name two conditions to constitute an offer?

Answer 21

1. It is intended to result in a contract if the other party accepts it, 2. It contains sufficiently definite terms to form a contract.

Question 22

Give three considerations for what an offer can constitute?

Answer 22

- Even if it is for free - An offer may be made to one or more specific persons or to the public - Offer to supply goods or services at stated prices made by professional supplier in a public advertisement for example, is presumed to be an offer to sell or supply at that price until the stock of goods, or the supplier’s capacity to supply service, is exhausted.

Question 23

When can an offer be withdrawn?

Answer 23

An offer becomes effective when it reaches the offeree, however, even if it is irrevocable, the offer may be withdrawn if the withdrawal reaches the offeree before or at the same time as the offer

Question 24

When does an offer become effective?

Answer 24

An offer becomes effective when it reaches the offeree

Question 25

When can one revoke an offer?

Answer 25

A offer may be revoked if the revocation reaches the offeree before it has dispatched acceptance or, in cases of acceptance by conduct, before the contract has been concluded.

Question 26

Name three situations in which revocation of an offer is ineffective?

Answer 26

- Offer indicates that it is irrevocable - Offer states a fixed time for its acceptance - It was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer.

Question 27

Name two condititons for how an offer can be accepted?

Answer 27

Declaration by the offeree: any form of statement or conduct by the offeree is an acceptance if it indicates assent to the offer. Silence or inactivity does not in itself amount to acceptance - Declaration of the offeree has to reach the offeror.

Question 28

Name three considerations on when an offer needs to be accepted?

Answer 28

Offer needs to be accepted within a reasonable or fixed time 1. Period of acceptance fixed by offeror begins to run from the time that the offer is dispatched 2. A late acceptance does not constitute an acceptance.

Question 29

What constitutes a counteroffer?

Answer 29

- A reply to an offer with an acceptance but it contains additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer In more modern times, these adjustments do not materially alter the terms of the offer, and therefore constitutes an acceptence.

Question 30

What is the difference between unilateral and reciprocal agreements?

Answer 30

Unilateral agreement: only one contracting party has certain legal obligations Reciprocal agreement: both parties have legal obligations.

Question 31

When is an offer concluded?

Answer 31

Contract is concluded when acceptance reaches the offeror. In case of acceptance by conduct, the contract concluded when notice of the conduct reaches the offeror.

Question 32

Name the three types of oral agreements?

Answer 32

1. Consensual agreements are the general rule 2. Formal agreements: formal requirements are required to constitute a valid agreement 3. Real agreement: agreement is constituted when an asset is being handed over to the other party

Question 33

What are personal agreements?

Answer 33

Agreements stand or fall with the person of one of the contracting parties. Namely, closely linked to the person of the debtor: - The contract can only be performed by the debtor - If the debtor dies, the contract is terminated.

Question 34

What are the consequences of a contract in regards to relativity and privity of a contract?

Answer 34

- Contract only creates obligations and rights for the contracting parties involved. 1. Other parties are third parties 2. Third parties only have to know existence of contract, not its contents, unless there are third party claims in the agreement: contracting parties can give rights to a third party

Question 35

What is required to supervise performance under a contract?

Answer 35

strict compliance to the performance of the contract. Sanctions in case of breach of contract:

Question 36

Two considerations in regards to sanctions in case of breach of contract?

Answer 36

1. Can contracting party in breach be excused (force majeure, hardship) 2. Sanction does not apply automatically. Formal notice ought to be served