Contracting and Contract Law - Nilima Bhadbhade
Contracting and Contract Law - Nilima Bhadbhade
Contracting and Contract Law - Nilima Bhadbhade
Contract Law
- Peter Siviglia
Parties’ freedom
formation discharge
performance consequences after
breach and consequences discharge
variation choice of law
term arbitration
choice of jurisdiction
Contract law: enforcing promises
Offer-acceptance
A contract is an agreement
Offer-acceptance analysis
Is there a contract ?
Invitation to offer
– Invitation to tender
– RFQ
– RFP
Statement of intention
Enquiries
Strategy
COLD IN THE HEAD ASTHMA LOSS OF VOICE SNORING HAY FEVER WHOOPING COUGH
COLD ON THE CHEST BRONCHITIS SORE THROAT SORE EYES HEADACHE NEURALGIA
£100 REWARD
WILL BE PAID BY THE
CARBOLIC SMOKE BALL CO.
to any Person who contracts the Increasing Epidemic,
INFLUENZA ,
Cold, or any Diseases caused by taking Cold, after having used the
CARBOLIC SMOKE BALL according to the printed directions
supplied with each Ball.
£1000 IS DEPOSITED
with the ALLIANCE BANK, Regent Street,
showing our sincerity in the matter.
Offeror is master of his offer
THE CARBOLIC SMOKE BALL CO., Ltd., now offer £200 REWARD
to the person who purchases a Carbolic Smoke Ball and afterwards
contracts … … … INFLUENZA . . or any disease caused by taking
cold while using the … Smoke Ball.
This offer will remain open only until March 31, 1893.
Starbucks coupon
Hi Everyone,
"C 2006 Starbucks Coffee Company. All rights reserved. One Grande beverage
per person per visit with this email. Please print and present this email to your Starbucks
Barista. Offer good only at participating Starbucks Coffee locations. Expires September 30,
2006. Barista, please use discount code 113."
Caribou
Options. No duty
– Keeps quiet
– Rejects
– Suggests changes
– Accepts (entirely)
Acceptance
“YES” to offer
Until offer is open
Unqualified
– The mirror rule : of all the terms of the offer
Unconditional
Manner
Acceptance: When is it complete ?
Face to face
On telephone
By post
– Acceptance binds offeror when posted
By email, fax
Offeror may specify that it will bind only on receipt
Place of contract
Formation
Public contracts
– Formation procedures subject to scrutiny by High Court.
Changes
Interpretation
– “Intention of parties”
Implying terms
A termination clause
Rogers Cable Communications v. Aliant Telecom Inc. (Canada)
Absolute
Exact performance
Matter of interpretation
Levels of obligations
Best Efforts
ABC shall make best efforts to market and sell the
Products in India through all of its distribution channels.
Obligation
Absolute??
The Contractor agrees that technical personnel shall abide
by the rules and regulations of the Company applicable at
the place of work.
Design of a clause
Independent
Dependent
Order of time
Secure performance
Whose obligation
Promisor (party)
– Promisor himself, or employ competent person
– Sub-contractor
Joint promisors
Death - Legal representative
Assignee
A contract for sale of goods
Description
Drawings
Inspection and acceptance
Non-conforming goods
Right to reject
Delivery
Give or take
Where
Instalments
When ordered from time to time
Price
Basis
Base level to which the price is related
Break up – main goods, other supplies, spares,
documentation, training, maintenance etc.
Advance and stage payments
Manner of payment
Ownership
Arrangement of obligations
Self-help remedies: Retention and Set-off
Guarantees
– Personal Guarantees
– Bank guarantees
Security of property
Bank Guarantee
no performance
defective performance
delay
Rights upon Breach under the law
Duty to mitigate
Damages – freedom of parties
Liable
– for certain losses only, and not others
– upto a certain amount only
– for stated amount – liquidated damages
Not liable at all – exclusion clauses
Limiting liability
Example – I
Example – II
Example - III
The aggregate liability of the parties under the contract shall be
limited to Rs. 2,00,00,000 (Rupees Two Crores only). This
limitation on the liability of the Parties under the contract shall
not prevent a party to claim compensation for claims arising out
of gross negligence or willful misconduct of the defaulting
parties.
Exclusion clauses
Pre-estimate of damages
Advantages : Different amounts
Amount must be reasonable : Court’s control
Applies to penalties
Incentives
Calculations:
– Rate,
– Style (fixed sum or percentage),
– Time-basis – monthly, daily
Liquidated damages
Example
(In a contract for purchase of goods)
If the Seller commits a delay in delivery of goods as
mentioned in the delivery schedule, the Seller shall be liable to
pay to the Purchaser an amount of 1 % of the price of
deliverable goods for each day’s delay.
If the delivery is delayed by more than 15 days, the Purchaser
shall have the right to terminate the agreement.
Subsequent changes
Extent - matters
Who can order
Form - writing
Payment
Procedure (to be strictly followed)
Variation clause
Equipment variation
The Purchaser shall be entitled at any time up to the ___ th day
before the Delivery Date to vary all or any of the Equipment set
out in the Schedule save that the Company shall not be liable
for any resultant delay in the delivery or installation of the
Equipment so varied.
Termination under ICA
Neither party to this agreement shall be liable for any breach of its
obligations hereunder resulting from causes beyond its reasonable
control including but not limited to fires strikes (of its own or other
employees) insurrection or riots embargoes container shortages wrecks
or delays in transportation inability to obtain supplies and raw materials
requirements or regulations of any civil or military authority (an “Event
of Force Majeure”).
Each of the parties to this agreement agrees to give notice forthwith to
the other upon becoming aware of an Event of Force Majeure such
notice to contain details of the circumstances giving rise to the Event of
Force Majeure.
If a default due to an Event of Force Majeure shall continue for more
than ____ weeks then the party not in default shall be entitled to
terminate this agreement. Neither party shall have any liability to the
other in respect of the termination of this agreement as a result of an
Event of Force Majeure.
Force majeure clause
Examples:
“There is no pending litigation.”
No warranty
Goods are sold and purchased “as is”. Neither party makes
any warranties, express, implied or otherwise, regarding
their quality, description, performance or fitness.
Warranty
The publisher will take care that this book will not contain
any defamatory or scandalous material or any material in
breach of copy-right of any person and will indemnify
and keep indemnified the printer again any loss, costs,
charges or expenses suffered or incurred by the
printer on account of such material or writing.
Indemnities
Within India
Jurisdiction decided by Code of Civil Procedure
– Defendant’s residence
– Cause of action
Parties can choose court
It must have jurisdiction under CPC
Jurisdiction
Example
Not conclusive
Substance of agreement
Receipt