LEGAL DIMENSIONS OF ENGINEERING

Law of contract

CONTRACT LAW LECTURE 1

What is Law of contract?

Applicable law of contact in Pakistan

Nature and formation of contact Definition

Components of contract
i. ii. iii. offer/proposal Acceptance Consideration parties to contact

WHAT IS LAW OF CONTRACT?

APPLICABLE LAW OF CONTACT IN PAKISTAN

The Contract Act, 1872. Available on:

http://www.paksearch.com/Government/CORPORATE/Contract/
Contract_Act.html

DEFINITION OF CONTACT
Contract An agreement enforceable by law is a contract. (sec:2(h))

Agreement Every promise and every set of promises, forming the consideration for each other, is an agreement. (sec:2(e))

 consideration: When, at the desire of the promisor, the promisee or any other person has done or abstained from doing or does or abstains from doing, or promises to do or to abstain from doing, something, such

act or abstinence or promise is called a consideration for the promise.

(sec:2(d))

COMPONENTS OF CONTRACT
Three Components of contract: 1. offer/proposal 2. acceptance 3. consideration

Promise

A proposal, when accepted, becomes a promises. SEC: 2(b)

Proposal+ Acceptance=promise

 1.

OFFER / PROPOSAL

PROPOSAL/OFFE R
When one person signifies to another his willingness to do
or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal. SEC: 2(a)

Shows his willingness to do or to abstain from doing anything Intends to get acceptance

IT MUST BE CLEAR

GURTHING V LYNN
Claimant buys a horse from a defendant for 63 pounds and agreed to pay additional 5 if the horse was lucky Held: too vague to enforce

 MUST NOT CONFUSED WITH Statement of information Invitation to treat MERE BOAST / PUFF

supply of information

 Harvey v Facey will you sell Bumper Hall Pen? Telegraph lowest cash price

Invitation to treat

 Display of goods in shopkeepers window Advertisement for sale in news-papers (partridge v Crittenden) Tenders

Share prospectuses

General offers

 Reward for finding a lost diamond/dog

Performance of act without knowing about the reward announcement???

 Unilateral contracts Bilateral contracts

Existence of an offer Communication of the offer

COMMUNICATION OF THE OFFER

BLOOM V AMERICAN SWISS WATCH 1. information about jewel thief

2. Reward not known to the claimant 3. Held: claimant not entitled to reward

TERMINATION OF OFFER
Revocation Rejection Counter offer

RIGHT TO REVOKE BEFORE ACCEPTANCE

routledge v grant 1. Offer to buy house 2. Gave 6 weeks to accept 3. Took it back before 6 weeks

Held: can revoke anytime before acceptance

Exception: if offeree gives something in return to keep the offer open

 1st OCT offer to sell 8th OCT--- posted letter of revocation 11 OCT--- claimant receives letter of offer and accepts by telegram

15th OCT--- telegram reaches

20th oct--- letter of revocation reaches

COMMUNICATION OF REVOCATION OF OFFER BY THIRD PARTY IS VALID

D offers to sell house. B inform C that D sold house already, Held: communication of revocation valid

REVOCATION OF PROPOSAL
(1) by the communication of notice of revocation by the proposer to the other party; (2) by the lapse of the time prescribed in such proposal for its acceptance, or, if no time is so prescribed, by the lapse of a reasonable time, without communication of the acceptance;

(3) by the failure of the acceptor to fulfill a condition precedent to

acceptance; or (4) by the death, or insanity of the proposer, if the fact of his death or insanity comes to the knowledge of the acceptor before acceptance.

WITHDRAWAL OF UNILATERAL CONTRACT

Not allowed after part performance

LAPSE OF THE TIME

Investor offers to buy shares in June Company accepts in November Investor does not want to buy

ACCEPTANCE
An acceptance in order to be valid must :

be absolute / without conditions Correspond fully with the terms of the offer/proposal

So following are not considered as acceptance of offers Counter-offer Equivocal ( ambiguous)or qualified acceptance Acceptance with changed terms This includes: inclusion of new additional terms. terms of offers being replaced or modified or removed