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Introduction to Contracts
David Stupples Professor in Engineering Systems School of Engineering and Mathematical Sciences
Module objectives
By the end of this module you will understand: The Basics of Games (1) Games theory extended (2) How to Negotiate successfully using gaming (3 and 4) Tendering and Pricing (Applying games theory) (5) Preparing the proposal (6) Introduction to Contract Law (7) Contract Example (8) Revision (9)
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Law of Contracts
In the commercial world, you are free to make any bargain you wish, provided that it does not conflict with the public interest, but when you have made your bargain, you must carry it out or compensate the other party for the bargain they have lost.
Types of Law
English law is divided into two empirical categories:
Civil law has two main elements: the law of contract and the law of tort. The former seeks to regulate the agreed, formal relationship between people. The latter imposes a duty of care not to infringe the rights of people, even those with whom we do not have a formal relationship can be described to cover any wrong doing for which an action for damages may be brought, but also covers criminal negligence and negligence. Criminal law.
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Sources of Law
English law is derived from a number of sources: Common law developed by previous judgements, or case precedent (including decisions on statutory law) Equity This is a system developed as a result of inadequacies of common law. Equity adds to common law through new rights, better procedure and better remedies. Judicial precedent where a matter of principle has been decided by one of the higher courts it becomes a precedent. Statute law This is made by parliament as its sees fit. It can repeal previous statutes, overrule case law, or make new laws in new areas. Constrained be the EU. Results from not having a written constitution. EU law directives pass into English law by statute Canon law made by the Church of England but based on Roman law.
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financial limitations. Crown court does not normally deal with civil cases. High court empowered to deal with any civil matter. Divisions that deal with contract law include Queens Bench Division, Chancery Division, Restrictive Practices Court, and Court of Appeal. Judicial Committee of the House of Lords European Court of Justice. Tribunals Arbitration Privy Council.
Law of Contract
To consider contract law we should understand: offer and acceptance the consideration functions of the contract validity of the contract the sources of mistakes in the contract duress and undue influence terms and representations termination of obligations remedies
The Consideration
A contract must involve a consideration or payment, defined as
an act, forbearance, or promise by one party with another that constitutes the price for which they buy the promise of the other
A contract without consideration is said to be nudam pactum, naked contract, and is said to be invalid. Consideration is governed by three main elements: Valuable consideration an economic value Sufficient consideration there must be some economic value but it might not be realistic Movement of consideration consideration must move from the promise, ie, payment follows delivery 12
A contract should fulfil three functions: Normal performance a contract should define what is expected from each party, and how their performance may be allowed to vary under certain circumstances Sharing of risk Contract involve risk. The seller, especially, is exposed to considerable risk. A contact should define how risk is shared between parties Coping with problems a contract should define how the more predictable problems are dealt with
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Termination of Obligations
Termination of obligations or discharge of contract takes place by: performing the contract carry out the obligations will discharge the contract completely expressing agreement which may involve either bilateral discharge or unilateral discharge effectively this is discharged by agreement frustration of contract typically, where there is a total or partial destruction of some object necessary to the performance of the contract; where legislative change makes the performance of the contract illegal; where death or illness prevents a party from fulfilling the contract; where an event which is fundamental to the contract does not occur breach of contract if one party breaks a condition of the contract, the other party may treat the contract as discharged; the injured party may treat the contract as still running and claim damages for loss.
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Damages
Damages Damages are defined as a sum of money awarded by a court as compensation for a breach of contract. Their purpose is to put the plaintiff in a position he or she would have been in if the contract had been fulfilled. However, this is controlled by the remoteness of the damage, and the extent to which the defendant is liable for the consequence of the breach. The defendant is liable, only if it was in his or her reasonable contemplation. Liquidated damages are a sum fixed in advance by the parties to a contract in the event of a breach. Unliquidated damages are a sum fixed by the court.
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Sub-clauses
Buyer Seller Documents making up the contract Contract works What the seller will supply Spares and Replacements Earliest/latest delivery Inspection and testing Marking Protection and packaging
Qualifications
Defines when responsibility passes Codes of practice Regulations Stipulations etc Responsibilities and procedures Maximum liability Period of liability Amounts/timings/methods Responsibilities for protecting confidential information/patents Ext to schedule/assignment sub-letting/dispute handling/termination and cancellation, bankruptcy/liquidation etc
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