Legal English Introduction to Contracts Contracts An

Legal English Introduction to Contracts

Contracts: An Overview • Contract formation: the process by which a new contract comes into existence • Requirements forming a contract – Agreement = offer + acceptance – Consideration • The persons who have formed a contract are the parties to the contract 26. Mai 2011 | Johannes Gutenberg-Universität Mainz

Contracts: An Overview • The content of a contract is referred to as its terms • Contractual terms can be classified as: – Rights – Obligations 26. Mai 2011 | Johannes Gutenberg-Universität Mainz

Contracts: An Overview • After parties form a contract, they must perform their obligations • If a party fully performs its obligations, it is 26. Mai 2011 | Johannes Gutenberg-Universität Mainz

Contracts: An Overview • After parties form a contract, they must perform their obligations. • If a party fully performs its obligations, it is discharged from the contract. • If a party does not fully perform its obligations, it has breached the contract. 26. Mai 2011 | Johannes Gutenberg-Universität Mainz

Contracts: An Overview • If one party fails to perform: the injured party may sue the breaching party for breach of contract • The injured party may request various remedies: – Damages – Specific performance – Injunction 26. Mai 2011 | Johannes Gutenberg-Universität Mainz

Contract Formation • To form a contract, the parties must first reach an agreement – To express that parties have reached agreement, use the verb “to agree” + an infinitive describing what the parties have agreed to do – “Smith agreed to sell his house to Jones” • An agreement consists of two parts: – Offer – Acceptance 26. Mai 2011 | Johannes Gutenberg-Universität Mainz

Contract Formation: Offer • An offer is a proposal to conclude a contract • How to express that an offer has been made: – Two verbs express that an offer has been made: • “to offer” • “to make an offer” – Combine these verbs with an infinitive that describes what the offering party offered to do: • “Stephen offered to sellhis car to Michael. ” • “Stephen made an offer to buy. Michael’s car. ” • Once an offer has been made: – The person who made the offer is the Offeror – The person who received the offer is the Offeree 26. Mai 2011 | Johannes Gutenberg-Universität Mainz

Contract Formation: Acceptance • When a valid offer is made, the Offeree has the power to accept the offer • How to express that an offer has been accepted: – Two verbs can express acceptance: • to accept • to assent (+ to) – Combine these verbs with the noun “offer, ” and you may also briefly describe the offer that has been accepted: • “Smith accepted Jones’s offer to sell his car. ” • “Smith assented Jones’s offer to sell his car. ” to 26. Mai 2011 | Johannes Gutenberg-Universität Mainz

Contract Formation: Acceptance • Rejection = the Offeree expresses that he will not accept the offer – “Smith rejected Jones’s offer (to sell his car). ” • Counteroffer = the Offeree attempts to change the offer, even if he claims to accept – To express that a counteroffer has been made, apply the same rules used with offers to the verb “to counteroffer” or “to make a counteroffer: ” • “Smith counteroffered (to buy Jones’s car) for $100 less. ” • “Smith made a counteroffer (to buy Jones’s car) for $100 less. ” • Once the Offeree has accepted an offer, the parties have reached agreement 26. Mai 2011 | Johannes Gutenberg-Universität Mainz

Contract Formation: Acceptance • Rejection = the Offeree expresses that he will not accept the offer – “Smith rejected Jones’s offer (to sell his car). ” • Counteroffer = the Offeree attempts to change the offer, even if he claims to accept – To express that a counteroffer has been made, apply the same rules used with offers to the verb “to counteroffer” or “to make a counteroffer: ” • “Smith counteroffered (to buy Jones’s car) for $100 less. ” • “Smith made a counteroffer (to buy Jones’s car) for $100 less. ” • Once the Offeree has accepted an offer, the parties have reached agreement 26. Mai 2011 | Johannes Gutenberg-Universität Mainz

Contract Formation: Consideration • A valid contract requires both agreement and consideration – Consideration = something of value – In common law jurisdictions, we say that each party must “offer some consideration” to the other party • How to express that consideration is present – There is NO verb form of the legal term “consideration” – “The contract/agreement is supported by consideration. ” – “The parties reached an agreement and consideration was present. ” 26. Mai 2011 | Johannes Gutenberg-Universität Mainz

Contract Formation • When both agreement and consideration are present, the parties have formed a contract • Verbs that express a contract has been formed: – to form: “The parties have formed a contract. ” – to exist: “A valid contract exists between the parties. ” – to enter + into: “The parties have entered into a valid contract. ” – to commit oneself + to: “The parties have committed themselves to construct a house. ” – to agree: “The parties agreed to construct a house. ” 26. Mai 2011 | Johannes Gutenberg-Universität Mainz

Contract Formation • Once a valid contract has been formed, it binds the parties – The parties must perform their obligations under the contract – If one party does not perform its obligations, the other party may enforce the contract in court • How the consequences of contract formation are expressed: – “The parties formed a valid, binding contract. ” – “The parties have entered into a valid and enforceable contract. ” 26. Mai 2011 | Johannes Gutenberg-Universität Mainz