Lesson 03 - Contracts

4. For each of the following situations, decide whether a contract has been made or if any of the elements are missing. In addition, try to identify the type of contract.

a. At an auction, the auctioneer says, “What am I bid for this antique clock?” One of the bidders in the room says, “100 euro.”

b. Ann’s father makes a promise to pay her 2,000 pounds on the day she turns 18. On her eighteen’s birthday she seeks the money promised to her.

c. John says to Paul, “I’m going to sell my bike for 100 pounds.” Paul cries out, “All right, here is the money. I’ll take it.”

d. Standing at one end of a long bridge, Sarah says to Louise, “I’ll give you three pounds if you walk across the bridge.” Without saying a word Louise starts walking across the bridge.

e. Adam offers Ken 10 dollars to steal four beer mugs from their favorite pub. Ken steals the mugs, brings them to Adam and asks for the money.

5. Summary of the Introduction to the law of contract

Here is a summary of the law of contract. Complete the texts using the following words:

agreement breach capacity consideration damages fraud illegal

(1) obligation oral performance property signed terms

What is a contract?

It is an agreement that creates a binding (1) obligation upon the parties. The essentials of a contract are as follows: mutual (2) ______________, a legal (3) _________________, which in most instances need not be financial, parties who have legal (4) _________________ to make a contract, absence of (5) _______________ or duress, and a subject matter that is not (6) ____________ or against public policy.

What form does a contract take?

In general, contracts may be either (7) _____________________ or written. Certain types of contracts, however, in order to be enforceable, must be written and (8) ___________________ . These include contracts involving the sale and transfer of (9) __________________ .

How does a contract end?

In case of a (10) _________________ of contract, the injured party may go to court to sue for financial compensation or (11) ________________ , or for rescission, for injunction, or for specific performance if financial compensation would not compensate for the breach. Specific (12) _______________ of a contract is the right by one contracting party to have the other contracting party perform the contract according to the precise (13) _________________ agreed.

(Source: Nick Brieger: Test Your Professional English. Law. Penguin English Guides. 2002, p. 14)

6. True or False? Answer T if you think the statement is true and F if you think the statement is false. Correct false statements so that they accurately express what can be found in the introductory text.

i. Not every agreement is a contract.

ii. Children have limited capacity to make contracts.

iii. A gratuitous promise is binding if it is made by deed.

iv. Being considerate is an essential element of a contract.