SVEUILITE/UNIVERZITET VITEZ VITEZ

FAKULTET PRAVNIH NAUKA

STUDIJ I CIKLUSA; GODINA STUDIJA: I CIKLUS; III GODINA

SMJER: OPE PRAVO

CONTRACTS

SEMINARSKI RAD

TRAVNIK, februar,2017
SVEUILITE/UNIVERZITET VITEZ VITEZ
FAKULTET PRAVNIH NAUKA

STUDIJ I CIKLUSA; GODINA STUDIJA: I CIKLUS; III GODINA

SMJER: OPE PRAVO

CONTRACTS

SEMINARSKI RAD

IZJAVA: Ja, Maja Rajkov, student Sveuilita/Univerziteta Vitez Travnik,

Indeks broj: 0247-16/ROP , odgovorno i uz moralnu i akademsku odgovornost
izjavljujem da sam ovaj rad izradila potpuno samostalno uz koritenje citirane
literature i pomoi profesora odnosno, asistenta.

STUDENT: Maja Rajkov

PREDMET: Engleski jezik I
PROFESOR: Vesna Biljaka
CONTENT

CONTENT...............................................................................................3
1. INTRODUCTION...............................................................................2
2. CONTRACTS......................................................................................3
2.1. THE OFFER..................................................................................4
2.2. THE ACCEPTANCE....................................................................6
3. CONCLUSION....................................................................................8
4. LITERATURE.....................................................................................9

1. INTRODUCTION

The law of contract is the body of legal rules governing the conclusion and
consequences of contracts. It defines the basis and requirements of contractual

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liability, as well as the rights and duties of the parties. Moreover, it regulates the
breach of contract and provides remedies for such breach. Finally, it governs the
termination of contractual obligations.

These rules, along with the law of delict and law of enrichment, fall under the
law of obligations, which is a category of the law of patrimony, forming part of
private law, which is fundamentally concerned with defining, protecting and
balancing legitimate individual interests. However, the classification of the law of
contract into private law is necessarily qualified by the increasing degree to which
private law and public law have come to overlap.

Contract is probably the most familiar legal concept in our society because it
is so central to the essence of our political, economic, and social life. In common
parlance, contract is used interchangeably with agreement, bargain, undertaking, or
deal.1 So commonplace is the concept of contract, and our freedom to make contracts
with each other, that it is difficult to imagine a time when contracts were rare, when
peoples everyday associations with one another were not freely determined.

2. CONTRACTS

A contract is a voluntary arrangement between two or more parties that is

enforceable by law as a binding legal agreement. Contract is a branch of the law of

1 http://2012books.lardbucket.org/books/the-law-sales-and-
marketing/s11-introduction-to-contract-law.html

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obligations in jurisdictions of the civil law tradition. Contract law concerns the rights
and duties that arise from agreements. A contract arises when the parties agree that
there is an agreement. Formation of a contract generally requires an offer,
acceptance, consideration, and a mutual intent to be bound. Each party to a contract
must have capacity to enter the agreement. Minors, intoxicated persons, and those
under a mental affliction may have insufficient capacity to enter a contract.2

Once a contract has been made, that contract is as binding upon the parties as
any statute or any other law, and one party cannot withdraw without additional
agreement by the other party or parties.

Most people make a number of contracts during each day. Every cab ride,
purchase of a grocery item, use of a soft drink machine, etc. It does not matter that
these contracts are oral, or are based on gestures or even a course of conduct.

As defined above, a contract is a legally enforceable agreement; an agreement

is a meeting of the minds. Since courts and juries are not mind readers, the existence
of this mental condition must be manifest in words, oral or written, or in actions.
(Verbal is not synonym for oral; verbal includes all words, written as well as
oral.) Although we sometimes call a written document a contract, the document is
only evidence of the mental agreement that constitutes the actual contract.3

The four essential elements of a contract are:

- Competent parties
- Mutual agreement
- Consideration
- Legality4

Each of the four essential requirements must be met in the formation of a

valid contract.5 Contracts may be classified by type of formation (express or
implied), performance (unilateral or bilateral, executed or executory), or
2 https://en.wikipedia.org/wiki/Contract

3 Robert W.Emerson, Bussiness Law, fifth edition, BARRON'S, 82

4 Robert W.Emerson, Bussiness Law, fifth edition, BARRON'S, 83

5 Robert W.Emerson, Bussiness Law, fifth edition, BARRON'S, 87

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enforceability (valid or unenforceable, void or voidable). A valid contract meets all
legal requirements and can be enforced by either party. An unenforceable contract
does not meet one or more legal requirements and cannot be enforced by either party.
For example: promises to make a gift (no consideration). A void contact has no
validity and cannot be enforced by either party. Examples are illegal agreements
made under threat or physical force. A voidable contract is binding on only one of the
parties. The other party has the option to withdraw from the contract or enforce it.
Examples are contracts made by minors and contracts made under under mental
duress.6

Under the law, only a person who is legally competent has the power to make
a binding contract and can be held to any promises contained therein. Persons who
may be considered to be legally incompetent include minors, insane persons, and,
sometimes under specified circumstances, intoxicated persons.7

The mutual agreement (assent) of the parties to a contract is manifested in two

legal concepts, the offer and the acceptance.

2.1. THE OFFER

The simplest way to form an express contract begins with a formal offer. This
offer may be transmitted by acts or words, spoken or written, directly to the offeree,
or in conversation, through the mails, by wire, by messenger, or through any medium
whatsoever.

Requirements of an offer:

6 Robert W.Emerson, Bussiness Law, fifth edition, BARRON'S, 84, 85

7 Robert W.Emerson, Bussiness Law, fifth edition, BARRON'S, 87

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 - It must indicate a clear intent to make a contract
- It must be sufficiently definite so that a court can determine the actual intent
of the parties
- It must be communicated to the other party

The offer should contain the fundamental ingredients of the contract; then
acceptance by the offeree will bind the deal.

Things generally not offers are: opinions, plans, requests for bids, invitations
to deal, social invitations, price lists, preliminary negotitations, and statements of
future intent (I plan to sell my stock). Similarly, general advertisements, catalogs,
brochures, and announcments are usually not offers because:

- They are not sufficiently definite,

- They are not communicated to a specific person or persons, or
- The circumstances of publication indicate lack of contractual intent.

An advertisement is not an offer unless it is addressed specifically to an

adentified or identifiable person or group.

If an offer does not specify a period of time during which it is to remain open,
it expires after the passage of a reasonable time. What constitutes reasonable time
depends on the implied intention of the offeror as shown by the property or goods
offered, customs of the trade or business, and the like. An offer to sell or buy
perishable goodss, such as fresh fruits or vegetables, or goods having an unstable or
fluctuating market, such as stock or other securities, is generally held not to remain
open as long as an offer to sell or buy real estate, a far more stable item.8

An offer may expire at an earlier time than stated because of rejection,

counteroffer, or the death or incompetency of either offeror or offeree.

2.2. THE ACCEPTANCE

8 Robert W.Emerson, Bussiness Law, fifth edition, BARRON'S, 89

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 Acceptance is a promise or act on the part of an offeree indicating a
willingness to be bound by the terms and conditions contained in an offer.9 In other
words, acceptance occurs when an offeree agrees to be mutually bound to the terms
of the contract by giving consideration, or something of value like money, to seal the
deal.10

Acceptance occurs in the law of insurance when an insurer agrees to receive a

person's application for insurance and to issue a policy protecting the person against
certain risks, such as fire or theft. When a person who is offered a gift by someone
keeps the gift, this indicates his or her acceptance of it. Acceptance also occurs when
a bank pays a check written by a customer who has a checking account with that
bank.

An acceptance may be conditional, express, or implied.

Conditional Acceptance sometimes called a qualified acceptance, occurs when

a person to whom an offer has been made tells the offeror that he or she is willing to
agree to the offer provided that some changes are made in its terms or that some
condition or event occurs.

Express Acceptance occurs when a person clearly and explicitly agrees to an

offer or agrees to pay a draft that is presented for payment.

Implied Acceptance is one that is not directly stated but is demonstrated by

any acts indicating a person's assent to the proposed bargain. An implied acceptance
occurs when a shopper selects an item in a supermarket and pays the cashier for it.
The shopper's conduct indicates that he or she has agreed to the supermarket owner's
offer to sell the item for the price stated on it.11

The acceptence of an offer should be clear and unconditional. A conditional

acceptance is treated as a counteroffer, and is a new offer and, hence, a rejection.

9 https://en.wikipedia.org/wiki/Offer_and_acceptance

10 http://study.com/academy/lesson/what-is-acceptance-in-contract-law-
definition-rules-examples.html

11 http://legal-dictionary.thefreedictionary.com/acceptance

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 Some courts hold that a unilateral offer is accepted by a clear commencement
to perform the act requested.

Since the offeror may withdraw his/her offer (and promise), however, the
offeree should confirm acceptance and thereby bind the contract as a bilateral
contract.

Silance does not constitute acceptance unless:

a) The offeror, observing the offeree acting in response to the offer, says
nothing;
b) The parties mutually agree that silence means acceptance; or
c) In previous dealings, the parties have considered silence to be acceptance.12

12 Robert W.Emerson, Bussiness Law, fifth edition, BARRON'S, 93

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3. CONCLUSION

In this essay I wrote about contracts. Contracts are important part of law in any
country and they represent a voluntary arrangement between two or more parties. In
this essay I mentioned some general stuff about contracts like definition, elements of
contracts, offer and acceptance. Definition of contracts is: A contract is a voluntary
arrangement between two or more parties that is enforceable by law as a binding
legal agreement. Contracts are present in every aspect of business, education, health
etc. We saw trough this essay the importance of contracts because it protects every
participant in it by law. Every human being is going to sign a lot of contracts in it's
life, so I think it is very important that they learn at least some basic facts about
contracts.

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4. LITERATURE

Book:

- Robert W.Emerson, Bussiness Law, fifth edition, BARRON'S

Web sites:

- http://2012books.lardbucket.org/books/the-law-sales-and-marketing/s11-
introduction-to-contract-law.html (05.02.2017)
- https://en.wikipedia.org/wiki/Contract (05.02.2017)
- http://study.com/academy/lesson/what-is-acceptance-in-contract-law-
definition-rules-examples.html (05.02.2017)

- http://legal-dictionary.thefreedictionary.com/acceptance (05.02.2017)

- https://en.wikipedia.org/wiki/Offer_and_acceptance (05.02.2017)

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