Week 9 contract

• Obligation


  Legal bond between two or more persons, made up of both a right and a duty
• Personal right


  • Only enforceable against the other party (person) to that obligation
• Real right

  • Enforceable against the world at large
• Types of obligations


  • Moral obligations
  • Civil obligations
  • Natural obligations
• Moral obligations


  Not legal obligations, they derive from your idea of the right thing to do
• Civil obligations


  Legal obligations enforceable by right of action, and breach will arise if not fulfilled
• Natural obligations


  Have legal significance but cannot be enforced in court
• Reciprocal obligations


  Two obligations that are linked in that the performance of one obligation is owed in exchange for the other
• Types of obligations


  • Simple
  • Alternative
  • Generic
  • Facultative
• Simple obligation

  Parties specify the exact performance to be made
• Alternative obligation


  Party can select two or more specified alternatives, debtor must make the chosen performance
• Generic obligation


  Party can select performance from a specified genus or 'family' of performances
• Facultative obligation


  Specifies the performance owed, but gives the debtor the right to choose to make a different specified performance
• Divisible performance


  Can be split into more than one performance if each sub-performance can be meaningfully performed on its own
• Indivisible performance

  Cannot be split
• Divisible contract

  Entire contract can be divided into several distinct contracts, so if one part is invalid/breached it doesn't affect the other parts
• Terms


  The stipulations that the parties include in their contract, and the provisions that by operation of law are included in contracts
• Types of contract terms

  • Essentialia
  • Naturalia
  • Incidentalia
• Essentialia


  Distinctive terms used to classify a contract as one of the specific contracts recognised by the common law
• Naturalia


  Terms that are automatically included into certain types of contracts ex lege (implied by law), often serve to protect one of the parties from a common hazard
• Incidentalia

  Additional terms that the parties have agreed on that add to or vary the rights and duties automatically included by law into the particular contract
• Types of contract terms

  • Express terms
  • Tacit terms
• Express terms

  Terms that are either written or spoken aloud (oral)
• Tacit terms

  Terms inferred from the conduct of the parties, arguably capable of giving rise to express terms
• Officious bystander test

  A hypothetical third party (a 'more imaginative friend') asks the parties what would happen in a situation they did not foresee and their agreement didn't provide for
• Material terms

  Vital to the performance of the contract, if breached, other party has right to cancel
• Non-material terms

  Breach only gives right to claim damages in absence of cancellation clause, e.g. payment and delivery
• Types of conditions

  • Positive
  • Negative
  • Suspensive
  • Resolutive
• Positive condition

  Will be fulfilled if event occurs
• Negative condition


  Will be fulfilled once clear that event cannot occur
• Suspensive condition


  Obligations not enforceable until it is known whether uncertain future event occurs or not
• Resolutive condition


  Obligations enforceable unless and until an uncertain future event occurs/doesn't occur
• Types of conditions


  • Potestative
  • Casual
  • Mixed
• Potestative condition


  Fulfillment depends on the creditor doing or not doing something entirely within their power
• Casual condition

  Depends on something beyond the control of the parties
• Mixed condition


  Depends partly on creditor's actions and partly on events beyond the parties' control
• Doctrine of fictional fulfillment

  Parties may not deliberately interfere with the fulfillment of a condition, if they do, the condition is deemed to be fulfilled / not fulfilled
• Types of time clauses

  • Resolutive
  • Suspensive
• Resolutive time clause


  Obligations will terminate at a certain date/event
• Suspensive time clause

  Obligations postponed until a certain date/event