Fundamentals of Contracts | Arnav Bali | Skillshare

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Fundamentals of Contracts

teacher avatar Arnav Bali, Film and Photography

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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

18 Lessons (36m)
    • 1. Introduction

      0:36
    • 2. Types of Contracts

      3:22
    • 3. Elements of a Contract

      0:31
    • 4. The Offer

      2:15
    • 5. Revocation of Offer

      1:28
    • 6. Acceptance of an Offer

      1:02
    • 7. Rejection and Counter Offer

      3:21
    • 8. Rules of Delivery of Acceptance

      0:57
    • 9. Consideration

      2:20
    • 10. Intention

      1:33
    • 11. Capacity of Contract

      1:40
    • 12. Capacity of Contract on Behalf of Another

      2:42
    • 13. Legality

      0:58
    • 14. Requirment of Writing

      1:59
    • 15. Privity of Contract

      5:20
    • 16. Void and Voidable Contracts

      2:21
    • 17. Breach of Contract

      1:33
    • 18. Remedies

      1:57
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About This Class

Hi, in this class you will all the ins and outs of contracts. Things from the types of contracts to some problems and how you can fix them. 

Meet Your Teacher

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Arnav Bali

Film and Photography

Teacher

Hello, I'm Arnav. I love doing whatever I do. I am very exited to teach everyone on skillshare.

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Transcripts

1. Introduction: Today we will be discussing about the law of contracts. That's the third unit at time t. By the end of this presentation, we shall be able to understand the meaning of contract. What are the different elements that are integral to a contract, that, that is essential to create a particular contract. And then to examine the legal consequences of the breach of contract. We would also learn the scope of the contract for its usage in the hospitality business transactions. 2. Types of Contracts: Okay, now let's see. What are the different elements of a contract. When we, before moving on to the different elements of a contract, let's talk about the different types of contracts. So as I said earlier, there could be but two people involved when VR entering into a contract, or they can be more than two people involved. And a contract would also be valid when there is only one person involvement there. Ok. So based on this contract, could be unilateral contracts. There could be bilateral contracts, and they could be multilateral. So what is a unilateral contract? In a unilateral contract, one party provides a promise and the other body provides the performance. Okay, so now what does this mean? Let me bring up an example from the hospitality industry, from the hotel industry. Let's say whenever that is a criminal, you know, who has to be bought by the investigating agencies so big. They most wanted criminals for them. They come up with this kind of notification that we ever finds. This could have a node would be awarded with us and such Award. Okay? So that Award could be a monetary award or India's most of the times it is wanted tree award, let say $200 award for anybody who finds the most wanted permanent. So now in this case, this is a contract that is made by the investigating log of vigilance team. And that's only one sided. There are 70 people on the other end who are expected to do the performance of finding the criminal. So there is no such promise made from the side, from the other side that we will find the criminal. But anybody who finds the criminal and reports lindsay Jante, that's a performance against the promise made by the vigil insurgency. That if that goes and finds it, will be awarded with an amount of $1000. So that's a kind of a unilateral contract. Second to that, we see that our bilateral contracts. So what bilateral contracts, okay, so now let me put it up like this, that bilateral contracts are the two, two-way contracts. So there are two parties in northern New Features and exchange of a promise. A promise. Okay, so when one party is making a promise that I will provide this and this, the other party is also turning it back with the promise that if I get this, I will also pay off this. Ok. So in bilateral promises still, the task will be made, but the exchange of the bilateral promise brings into existence the contract that the parties then performs with the performance happens later, but before that, there is a promise that is made by both the parties. Promise or fulfillment or do you all put on the acceptance? Alright, so let's move ahead. 3. Elements of a Contract: So we've been talking about what are the different elements of a contract. So we see that our six essential elements to any particular contract beat any kind of contract. These other six essential elements that have to be there to make a phone crack. Oh, Ballard contract. Okay. So these six essential elements are the Allport, acceptance, consideration, capacity, indention, and legality. So now let's look at this, what each element of a contract signified. 4. The Offer: Starting with the first one, what is an offer? We have talked about this type of contract. Okay, let's talk about the offer. So what is an offer? Offer is tentative promise. Okay? We say that there's a tentative promise. So often means if it remains standard, Tim, I'm Billy, it is accepted by the other party. Okay. So if there is no acceptance, the author becomes invalid. So that's why we say it's a tentative promise made by one side. Then the other element to an offer is that do you all put is conditional, that also do conditions of life. Ok. Let's take the example that it is conditional basically on the time Peter, the offer is binding during a conditional time period. So when the time Peter gets lapsed, then the opposite also becomes invalid. So many a times we say VBE read the advertisement coming up with an offer that C is battered. Who did this? So the different stores or different companies on making an offer that if you purchase within this much time, then you will get and reduction in the price. So that's an offer, that deal baking. Ok, but that offer is conditional, that awkwardness tentative tend to do why? Because only when there is somebody to accept it then becomes valid. And you offer with has to be accepted within a certain cream of time. Otherwise, it may labs. So we see that it may labs at the opportunity does not accepted by the deadline. The A3 does not accept within a reasonable time and one part di di loses the capacity to go corn track. But let's see if the company becomes bankrupt. After making the offer, then you offer me laps. Okay? So that's what an all put into that Tim, essential element of a contract. So that has to be an open wheat by one party. 5. Revocation of Offer: And the second part to a contractor's the devastation that there is a provision of revoking. The aqua revoking means withdrawing water, cancelling the offer any departed was we do offer also has the freedom to revoke. The offer can be revoked or leave before it is accepted. Okay, now, let's take an example that one person to the other pipe will made an offer to the other party that if you cross this lake, I will give you a $100. Ok. Now that person the other person did not accept that awkward now, okay. Before because it accepts the offer if the first person who has made you of the draws it okay now I dot J mm, I don't want you to swim across, delete. Okay. Then is that that offer is not valued, but once the person concedes to the opposite, okay. I i agree and jumps into the lake and starts to me, then offered cannot be withdrawn. Okay. Then the option is an agreement by revocation of an opposite is an option that doesn't agreement by an offer to even offer open forest, but it's quite feet or so before the offer is accepted. It can be revoked. 6. Acceptance of an Offer: The second element to a contract as the acceptance to an offer. So one person makes an off what the other person has to accepted. So a causative or unambiguous. Unambiguous means clear agreement to the terms of the offer. Being accepted. Acceptance also can be verbal or it can be bitcoin duct or by performance. So somebody who who did not say verbally that OK, I accept your offer, but just Docs performing it. That performance is also considered to be as an acceptance to a norm. Okay? But the rejection to an offer can also be made silent p, You do not agree, and you you did not even say. Okay, that can also lead to the rejection too often offer that can also be termed as the rejection. 7. Rejection and Counter Offer: Okay, so when we talk about rejection of ejection of an alpha by beautifully dominates it. So which means that the offer is not accepted to that is no contract. Okay? Then that is another DOM coalesce counter output. So what is counter offer? The counteroffer by the opening dominates the original operand makes the ratio. So let's say, for example, you applied for a job position and the employer the employer has hired un present an offer. Okay. Now this is not the what do you call it? The first thing that when we apply for a job is we get an offer to employment. Ok. So that offered to employment has certain terms and conditions or the employment contract. Now you as the prospective employee, there are certain elements of their takfir which are not agreeable to you. Or you think that you want to negotiate on those terms and conditions. So now what you are saying would be a kind of a counter offer made by the opportunity to use the one to whom the offer is made. Okay. So you would say, I would want you to modify these these these certain Tom's off, you're off. Okay? So that is the counter offer made by you. So once you make a counteroffer, the original offer, Dominic's, okay, so that's the cancellation of the original offer. And now, if the operand wants you to continue with that employment contract, you would draft that offer. Again, afresh by including the counter offer made by you. Right. And that becomes a new often. We are not just referring to the employment offers on the contracts that are applicable in employment AS many of the times when you are not in the negotiation, then your counter offer may be rejected by the offer, the offer. But when we talk about other cases like, let's say real estate contracts, or when we talk about hospitality industry, you go at the offer made by the hotel is that they are offering certain rooms at a reduced price. Okay? You are the offering and you count the offer them that you are ready to pay. A price that is offered to buy them. At even a lesser price that you can agree. You will take up the room only when you either include certain more facilities or if you offer it at a reduced price, even a further reduce price. Okay, so that's a counter offer. Most of the times when the hotel is not in high demand position, they might accept your turn off when you go and buy a property. And the seller has made certain of and when there are not many buyers in the market. And if you made the counter offer most of the time, that comfortable for its accepted. So until it is acceptable to both the sides only then the contract will be in place. So that's what a counteroffer. 8. Rules of Delivery of Acceptance: We are talking about the acceptance of the opera pit. So that's the second element or the awkward. What are the rules of delivery of acceptance is not in order to do mock your acceptance to an offer that can be saintly. Acceptance can either be sent and writing by E, by mail, by email or by fax or by telegram. Why did the acceptance can also take place globally, in person or by phone? Okay? So these are the different mediums by which the acceptance of the offer can be delivered. The applicable law is that of the place where the acceptance occurs, okay, so it also makes a difference that where was the acceptance happened? So what was the place where the acceptance took place? So that's also 1 consideration. 9. Consideration: The third element to a contract is consideration, and this is a very important element of a contract. So find that as somebody to make an offer to someone else who accept the 4G phone. Whether the output is unilateral, bilateral or whatever. The important thing to be, to be considered here is that what is the value that the other person is getting? What is the point off? Punchy duration. Ok. So the head of the concentration most commonly is expressed in 13 dose or something of value. Okay? So consideration constitutes deep price of party pays for the promise of the other party. Lacked is what consideration is, okay? So price is most commonly expressed in monetary terms. But consideration may not always be 13 in nature. So it can be in exchange for something of value, for forgetting something. So let's say that that is a person who offers to sell his car to a person B, let's say that two people, person a and person B. So depots and AOL question wasn't be his scarf or a configurational $100. Okay. I mean, I'm I'm really talking in fictitious values below $100 is nothing photocopy. Ok. And she accepts and enforceable ordered gone practice creator, right? So that's an older gone drag. One for simplicity is selling his car, was nb is the buyer. The consideration yet is $100. Okay? So concentration means the price, one body once in exchange or something. Okay? So that does work. Concentration is, concentration need not be moneyed consideration need not be fit. Concentration may be represented by for the seed. 10. Intention: The fourth element to a contract is the intention to create a legally relationship. Okay, so whether that is an intention to enter into a contract to donate to any kind of legal relationship is a very important element to contract. So all the parties who are entering into a contract must have an intention to create it. Okay? So intention to create a legal relationship is default essential elements of a contract. Unless the parties intend to make a contract. That is no contract. The contract may state that the party's intent to be legally bound or the intention may be inferred from the conduct of the parties. Right. So the language may be used to express the intent that they are willing to enter into this contract. The intention can mean for Tom Dee conduct also up to the conduct of the parties to right. So the party is saying, yeah, I want to accept the offer, but I want to enter into the contract. But their behavior, their performance that is not reciprocating the same. Okay, so that is, that means that the intention to enter that contract is missing. Alright, so that's the fourth element to the contract. 11. Capacity of Contract: The fifth element of a contract is the capacity, capacity of the parties to enter into the contract. Okay, now what do we understand by the dub capacity? So if one party one of the party lacks the legal capacity to enter into the contract. I'm using the dummy legal capacity, you know, gone crack may be void, quote, avoidable depending on the circumstances and the type weapon capacity. Okay. Now, incapacity, legal incapacity constitutes mental illness or substance abuse. Centrality to the other party should have been aware of the lack of capacity. Even centrality means D minor H, OK. So when the person is a minor with whom you are entering into a contract, then that contract is incapacitated. That part of the body does is not in the legal capacity to enter into a contract somebody then you are entering into a contract with somebody who is not mentally fit. Okay? Thank you. Challenge then that becomes a legal incapacity. Alright? So the person who are, the people who are entering into a contract should be in the legal capacity to enter into the contract. Whenever it violates, the contract becomes void and one graphic contract becomes invalid. 12. Capacity of Contract on Behalf of Another: Capacity to contract on behalf of another and the agent, business partner, officer of a cooperation or someone that followed up autonomy, then Goldratt on behalf of another. Okay, so most of the times when we are not available in books or automobile places, so be good on the photo. Photo need to an agent, to a business partner, a family, close enough lab and post them on all n0 equal officer to enter into the contract on our behalf. Okay. So power of autonomy is a special form of agency whereby the donor in writing grants power to whether Dani to act on his behalf. So I gather Tawny means basically an agent. So this agent may need not be a lawyer on Greece. And the person who is passing one, the father of autonomy is scored as the loader. And who pass on the power of autonomy or to enter into this kind of an arrangement. The Poisson has to be into the legal major h, okay? That means so at least 18 years of age. I'm talking about the Canadian Post spectrum. He's 18 years of age that goes entropy mentally competent and must understand the followers that he or she has not did too few. Or dawn, you are the agent. Okay. And now this follower maybe restricted or it may cover property first new kid or medical treatment, etc... Another thing that we must get in mind is that the authority or the agent must act in the best interest of the Buddha and his library to the donor for the losses resulting from unreasonably conduct go back. So if the problem for felonies, Doctor two, an agent and that Egypt is not acting in the positive phase of yours, then that person is responsible for all the losses that you face. Ok? Now, the limit on capacity to contract may arise for someone with diplomatic immunity for some native people went bankrupt or for enemy aliens. Okay, so that means that the power of orthogonality is, does not remain valid in these cases. That is a discussion board. 13. Legality: And the last and the most essential element to a contract is it's legalities with this is the central element of the contract. Absent legality, that is no corner drag. So when the legalities nor Deb and the legal element is not there, the current practice in Butler becomes void. But goes over contract is to is not to break the law. Okay. So whenever we are entering into a contract reattach to BP could be finding which means it should not break the law, should not be against the public policy. So if it is, if it is an illegal Gordon dragged up, the legal element is not is not there. The contract will be either void or illegal or unenforceable. It cannot be enforced. Alright, so these are the six important elements to contract. 14. Requirment of Writing: The other elements to a contract formation includes the requirement of writing, probability rule, the BOD performance. So let's talk about them. Wharton's requirement of writing. Majority of the one tracks as we discussed before, they may not be written contracts, but they can be ordered contracts. They can be partly oral contracts, partly retain all the Thai leader to contract. The most common exceptions up on drags for interest in land and getting things. So whenever we are entering into a contract, which in watts, adding fees, and that is the garden track will be applicable only when it is in writing. If it is not in writing, then such contracts are not finding. Ok. And this is an exception will lead to the corn tracks late, you do learn and guarantees. So other than that they're domestic contracts, manage contracts, cohabitation agreements, separation agreements. Besides that, they are also the different types of contracts which are also enforceable only when they are in writing. Okay, when we talk about the international laws, a model is valid only when it is, it has a legal contract. Okay? So manage registration, there's something that you have to produce. So all these are some of the common examples that we see that the contract has to be inviting for. That is the other exceptions are I mean, that's what I just told you. In case of the contract can be ratified if it is not in writing, if it is for the case of a minor. Ok. So these are some of the cases where the contract needs to be in the 90. 15. Privity of Contract: The other important element of a contract, we scientists six essential elements is called as the private key of the contract or decrepitude with. So what is the probability rule? Now, we see that the obligations and the benefits that come out of a contract that arise out of a book contract, they are mostly confined to the parties that I wanted to a contract. Okay. Now that benefit audio obligation on that contract would not pass on to the target person who was not a party to that contract, right? So the under the common law rule of gravity, the contract does not impose any obligation or any benefit upon d nonbinding. So somebody was not a party to the contract will not be able to get any benefit out of this. But then there are some exceptions to this property that it all remedy and that applies to the employers when that is any breach done by the employee in case towards their employees. And I think we have discussed about this term in the previous class, vicarious liability or the fiduciary duty. Don't do that if there is any damage that happens too, and employ why? He's remains employed in an organization. In that case, it is solely the responsibility of the employer to pay damages to that employee. And this responsibility, this liability of the employee is gone as vicarious liability. Okay? So when I talk about the primitive of contract and, and when I say that vicarious liability of the employer happens to be an exception to the perimeter of the contract. I mean that if there is any benefit or an obligation that is demanded by an employee going to be loss or damage that has happened to him during his employment in an organization. And whether that loss or damage is not directly related to the employer ought is not even written as a part of this contract. Still, it is the responsibility of the employer to be entered. So that is a violation. I mean, that is an exception to the liberty of the contract because he may not be a party to that contract, but he still has the library tuple works, the employees. Besides that, that I don't have any appreciably or offer trust on the life insurance to enforce it against that trust you have each other. So whenever we buy a life insurance policy for ourselves, up your life insurance policy, the contract is between the person who get to ensure and the person leading the life insurance company. But the benefit is dawn to the nominee. Okay. So that is again, an exception to deep Repartee of the contract. And then the next section to deep liberty of contract is the tort law bypass tort law bypasses and make it to the law of negligence. Under the law of negligence, people who are not privy to a car track native cover damages for the injurious consequences or per contract by swing and negligence in sort of swing and gone track. Ok, so I'll give you an example for this talk Law bypass. So people who are not party to a contract can sue the the party for negligence cases when so if a hotel has deception contracted for bio host and the guest of the walls, sumptuous food poisoning. The stricken guest cannot sue the hotel inborn track because there is no connectivity between the guest and the head of other guests can bypass that roadblock by swing and negligence. Okay. So now in this example, when the host off reception party has contracted with a hotel for catering purpose, God practice between the host and devoted. These are two parties inward. No. The gas talked a boast who come to that perception party. Okay. And they support the food poisoning. They directly cannot sue the hotel because they are out of contract. But they can sue the the hotel through this law of tort law bypass. Okay. That is by swinging negligence. There was some negligence on the part of the truss and the particle dead for which the Stark law by a POS is an exception to distribute to you on track and follow dank and z2. Okay? So that's about liberty of contract. 16. Void and Voidable Contracts: Then we love to talk about what are the wide quadrats and why did we put attracts? A wide contract arises it run off, the essential elements of the contract is missing. So if any of these six elements of the form drag that we discussed a yard on reducing that god draft becomes void. Ok. So be it general foot an acceptance, consideration or began it BUN thing is then the quadratic becomes point. A wide-open barn, Dr. Gibbs, the innocent party, the auction to descend upon brackets means to cancel the contract or who insist on deep appointments. Okay, so that's the legal remedy to wider and wider the contracts. Contracts can be discharged. Discharge means they can be Woodford only by performance on, by human outgo frustration on auto cooperation by law. So we will not be going much into the detail of this. However, there are a lot of case studies available online in a book that I've referred to you. You can refer to those cases to understand them in detail. Then comes the dummy impeachment of the contract. Impeachment means then you do not consider that contract would be to be the most appropriate contract or binding contract you want to come out of it. So far, graphs may be impeached by the victim or the offending behavior. The victim has different remedies to this. Depending upon the nature of fuel printing behavior, then is a new offense so that the victim cases could be due to students means that wasn't has been fetishized. Okay. To perform that contract. So in that case, the guard drag can be impeached or there is some undue influence, or by mistake or by misrepresentation. In that case, the contract can be impeached or delaminated. Okay. 17. Breach of Contract: What other breaches of contract and know how do we see that the 5B is usually considered to have met his auto obligations. I have no contract if the applications are substantially but phone. So breaches of contract normally happen in cases of repudiation, failure to perform on in gazes off sabotaged. So repudiation when a party declared that he would not comment or compute the platform that's required by the word grok and thereby repudiating or denying it. Abbreviation means denying, okay, that you have entered into a contract, but then you deny I'm allowed to work so that somebody job quarter draft and that's vendor legal records can be taken. Failure to perform is another we will reaching no contract. So you promise something but you did not perform accordingly. So you can take a legal recourse when there is a failure to perform on it gives off Sabbath dad. So 15V may put all movement for lack that is in contradiction to the agreement. Okay. Or the renders the contract incapable of being performed. So that is sabotaging the car drive that you are deliberately not doing it. So that does refusing to pay for what, anything, anything that has been promised. That is called as Southern diagram, that comes under the breach of contract. 18. Remedies: Now we can see what are the legal remedies to them. Legal remedies are what? The breach of contract, position, recession, if the parties can be returned to the free contract state. So any knobs and party may hope to rescind the coronagraph and start off by continuing to enforce it so they can go get back to the street that that is no contract. And that event they innocent party cannot seek damages. So when innocent party agrees, okay, fine. I wanted to withdraw this contract so that is no no control of getting any any damage against losses. So these are some of the lipid recession damages, injunctions, Indonesians are like that, and then it knows and party may wish to restrain and offender from acting inconsistently with the contract. If our Dinah has an exclusive contract with the supplier of the papaya, they're dynamic and joined the supplier for supplying the compilers do a competition for the duration of the contract. So in trimming junctions maybe obtained aren't going to be my Piketty did. So this is basically like you have delayed you have delayed the process, so the magnet is to still be on board. Okay, I'm filled up performance do during this process is unwarranted performance. Make me happy meat. Okay, so that does one legal remedy. So besides that specific performance, quantum, quantum medium, it means the amount he mattered, applying the principle of quantum grew to court may award the d's nibbled word of the goods versus the court made. Depending upon what is the emitted on the innocent party may decide how much damage has to be to be covered up by the other party. So that Dischord is immediate.