MITO JOHN OSOO MITO JOHN ITO BY AIRES (IBA) THE LAW OF CONTRACT EDITED EDITION I GOT A DREAMS THAT’S WORTH MORETHAN MY REALITY AND PRIDE THAT’S WORTH MORE THAN A SALARY AND A CHARACTER WORH LOVING GENIUS DOES WHAT IT MUST TALENT DOES WHAT IT CAN, AND YOU HAD BEST DO WHAT YOU ARE TOLD “ SOMETIMES LIFE GIVES YOU A SECOND CHANCE BECAUSE MAYBE THE FIRST TIME YOU WERE NOT READY ”
CHAPTER SEVEN THE LAW OF CONTRACT OBJECTIVE To provide the candidate with a broad understanding of the following concepts pertaining to the Law of Contract; • The nature of a contract. • Formation of a contract. • Classification of Contracts. • Terms of contract; Exemption clauses, conditions and warranties. • Vitiating factors; mistake, misrepresentation, duress and undue influence. • Privity of contract. • Termination and discharge of a contract. • Remedies for breach of contract. • Limitations of actions. INTRODUCTION This chapter deals with the formalities that are involved before a contract comes into existence. It then looks at the terms of contract, vitiating factors and the eventual termination or discharge of a contract. KEY DEFINITIONS: • Offer: an unequivocal and clear manifestation by one party of its intention to contract with another. • Unequivocal: clear, definite and without doubt • Invitation to treat: This is a mere invitation by a party to another or others to make offers or bargains. The invitee becomes the offeror and the invitor becomes the offeree. A positive response to an invitation to treat is an offer. • Acceptance: This is the external manifestation of assent by the offeree. • Revocation: This is the withdrawal of the offer by the offeror. • Consideration: It has been defined as “an act or promise offered by the one party and accepted by the other party as price for that others promise.” • Estoppel: It a doctrine that is to the effect that where parties have a legal relationship and one of them makes a new promise or representation intended to affect their legal relations and to be relied upon by the other, once the other has relied upon it and changed his legal position, the other party cannot be heard to say that their legal relationship was different. • Conditions: This is a term of major stipulation in a contract. If a condition is breached, it entitles the innocent party to treat the contract as repudiated and to sue in damages.
• Warranties: This is a minor term of a contract or a term of minor stipulation. If breached, it entitles the innocent party to sue in damages only as the contract remains enforceable and both parties are bound to honour their part of the bargain. • Merchantable quality: Fit to be offered for sale. Reasonably fit for the buyer’s purposes • Privity of contract: This doctrine is to the effect that only a person who is party to a contract can sue or be sued on it.