Contract law is the rules and regulations which govern the nature of agreements between people or individuals.
Intellectual property is something which results from the activities of a person’s mind- that is, something that comes into being because of the expression of someone’s thoughts.
IF Okello, a chappati maker agrees to make two chappatis for Stella a University student, his customer, which she will pay him Uganda Shillings 1000 for. How can you tell if it is a valid contract?
A valid contract must have a series of features, which include;1. Parties. The parties to the contract must be defined. This means they must be easily identified. Using this example, the parties are Okello the chappati maker, and Stella the University student.
2. An offer. An offer is where one of the parties communicates willingness to the other party to do something for them. Using the example, the offer is where the chappati maker puts his chappati stand somewhere and makes it known that he is willing to make a chappati for anyone.
3. Acceptance. The acceptance is where Stella having received the offer, and being happy with it, chooses to ask for two chappatis.
4. Consideration. This is the condition upon which the party who offers will perform his part of the contract. In this instance, consideration is payment for the rolexes which is agreed upon at Uganda shillings 1000 for two chappatis.
HOW MUST A CONTRACT LOOK?
A contract may be written or oral. But in some circumstances, it is a must to have a written contract. There are also situations where a contract can be part oral and part written.
This is a contract which is not recorded in any way. Like the contract between Okello and Stella, this contract is entered into by spoken words. As you can imagine it would not make sense to sign a written contract every time you want to buy a chappati or use a taxi.
Oral contracts although not written, are legally binding and can be enforced by law.
HOW ORAL CONTRACTS CAN BE ENFORCED
When one enters into an oral contract, it is very hard to prove that there was a contract if the other party denies that it existed, however if there is anything that can be used to prove that there is a contract- for example any third party who has personal knowledge of it, or who was present when it was being entered into, then it can be proved.
A Partly written and partly oral contract is one which is partly entered into using the two modes.
EXAMPLE OF A PARTLY WRITTEN, PARTLY ORAL CONTRACT
For example: Musa is building a house and he goes to Muhumumuza’s hardware store. When Musa gets to the store, he bargins with Muhumuza for all the items he needs and once they finish agreeing on all the prices he writes the items down along with the agreed prices on a piece of paper and leaves it with Muhumuza promising to come for the material later that day in a pick up truck with all the money and asking that it be made ready.ORAL PART OF THE CONTRACT- The oral part of this contract if we are to look back at the basic elements of a contract is;
- The identity of both parties (that is Musa and Muhumuza),
- The time at which the contract is supposed to be executed, that is in the evening of the same day.
- The time and mode of payment- later that evening, and payment in full upon receiving the materials.
- The material to be purchased
- The price of each item.
In order to enforce a partly written and partly oral contract. A party needs to present proof of the contract as usual. This is easier because the written part of the contract can be used to prove that there is some sort of contract in place already however as explained previously proving the oral aspect of a contract can be very troublesome.
This is a contract entirely in writing. With such a contract all elements of the contract can be found in a document where both parties have properly been identified and all terms of the contract are clearly recorded.Why are written contracts important?
Written contracts are very easy to enforce because within them one can easily tell what responsibilities each party has and how each party is expected to perform. This means that if one party fails to carry out his part of the contract it is very easy to hold that party responsible since everything in the contract is written on and was clearly agreed upon.
Where a party does not do the things agreed upon in a contract, this is known as Breach of Contract.
Breach of Contract can be very inconveniencing for the other party who carries out his or her part of the contract. Using the example of Musa and Muhumuza, imagine Musa shows up to the warehouse in the evening ready to pick the material having hired a pick-up and Muhumuza is not ready with it?
Musa will have;
- Wasted his time going to the shop,
- Wasted his money hiring the pick up,
- Wasted his money paying the kadogos who were supposed to lift the materials and put them on the truck.
- Compensation for loss or damage cause by breach of contract
- Compensation for breach of contract where there is a penalty agreed upon in the contract
- Specific performance. This means that the party who breached the contract can be directed to perform it’s obligations under the contract.
Having suffered so much loss, it is unfair if Muhumuza who knew about Musa’s coming and who had agreed with does not compensate Musa in any way.
A person who does not perform his or her part of the contract is said to have committed “breach of contract” and depending on the nature of the contract if one suffers loss and takes the party who committed the breach to Court, that party can be made to pay;
- Agency Contracts
- Bailment Contracts
- Guarantee Contracts
A Guide to a legal Contract
Whether a small business or individual. Learn more about the best way to write contracts, their important aspects and how to enforce them. Click on the image to see a larger guide.
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