Fundamentals Of Contract Law For Newbies

1. Module 1 – Module 2 – Module 3 – Module 4 – Module 5 – Module 6 – Module 7 – Module 8 – Module 9 – What Is A Contract ? What Is Law ? And Its Sources Meaning Of Stare Decisis, Case Law, Rules Of Equity, Common Law Etc. Insight On Rules Of Equity Important Law Concepts Insight Into Landmark Case Laws Understanding the Arbitration Process With A Case Study Challenging the Award of the Arbitrator (A Case Study) Recap & Application Of Course Modules DETAILS OF TRAINING COURSE CONTENT BASIC FUNDAMENTALS & UNDERSTANDING CONSTRUCTION CONTRACT LAWS

2. Welcome to the first module BASIC FUNDAMENTALS & UNDERSTANDING CONSTRUCTION CONTRACT LAWS Let us start with a simple test. 92 % of test recipients did not get it right but all agreed that the test was an “eye-opener” . After the test, you should be able to better understand and grasp the basic principle underlying Construction Contract Laws.

3. Many of you have attended Construction Contract Seminars over the years. In the course of these seminars, we are sure that at some point , some presenters would have made the following statement. “ Every Contract is an Agreement but not every Agreement is a Contract !”

4. Unfortunately, none of them ever explain the meaning of the statement and in fact left you to ponder or find out for yourself. It is interesting to note that the statement when posed as a question which is “When does an a Agreement becomes a Contract ?”, 98% of test recipients did not know the answer. Summary of the answers received are :- 1. 2. 3. 10% said there were no difference. An Agreement and a Contract are one and the same. Only a choice of words. 5% said that Agreement was an American word while Contract was a British word. 25% said that an Agreement becomes a Contract when it is in writing and signed by the parties.

5. Only 8 % knows the answer. Are you in the 8% or do you belong to the 92% ?. 4. 5. 6. 40 % said that for a Contract to exist, there must be an offer and an acceptance and all the other requirements as stated in all contract law textbooks such as sound mind, legal age to contract, etc. 12% said that the Agreement must be stamped and the stamp duty paid for it to become a Contract. Only 8% manage to answer correctly

6. Before we reveal the answer, let us examine the answers received. Answer No: 1 & 2 are wrong as this is not the case. In either English and American usage, both words are used. And in both countries, the two words are not one and the same. Answer 3 is not entirely correct as everybody knows that there is such a thing as a verbal contract . And in a verbal contract, it is neither in writing or signed.

7. Answer 4 is almost correct but not quite the answer as there are other requirements in law that must be considered. Answer 5 is also not correct as this is only one of the many requirements in law. As the contract documents can be stamped retrospectively, it is only a procedural requirement. Before you proceed to the next page, you must seriously focus your mind on the answer.

8. “ An Agreement is a Contract only when it is Enforceable By Law” Did you get this right ? If you did, congratulations as this indicates that you can now begin the journey on the road to better understand “What Is A Contract” If you did not, then spend a few more moments to understand why the above definition is so important in the study of Construction Contract Laws.

9. “ An Agreement is a Contract only when it is Enforceable By Law” What is the significance of the above statement ?. Well, for starters an Agreement which is not enforceable by law is only a piece of paper and therefore totally worthless . For an Agreement to be of any value, it must be enforceable by law. An Agreement in different countries will have different effect as the law in every country are not exactly the same . Therefore it is important to know and understand the law in each country to be able to draft or agree to an agreement which is enforceable in that country .

10. “ An Agreement is a Contract only when it is Enforceable By Law” Therefore for an Agreement to be enforceable by law, it must comply with the laws of the country. Requirements advocated in contract law textbooks such as capacity to transact, the ingredients of offer and acceptance, impossibility of promise etc. are not enough. It must also comply with the other laws such as the various acts and statutes passed by parliament, natural justice, rules of equity, judicial court judgments and doctrines/principles of law supported by the laws of that country.

11. “ An Agreement is a Contract only when it is Enforceable By Law” Natural Justice, rules of equity, doctrine/principles of law, common law. What are all these ?. They are law concepts which when applied in Court Judgments, they become common law. Are they important ?. Yes, as we explained above they are the backbone behind most Court Judgments. A large number of you would most probably have a rudimentary knowledge of these laws. It is necessary for you to have a thorough understanding of these law concepts for the reasons explained above.

12. “ An Agreement is a Contract only when it is Enforceable By Law” By now, we believe you would have realized the importance of an Agreement being “enforceable by law” and the requirements for such compliance. In short, An Agreement is a Contract only as far as the Clauses contained within are valid in law. Those Clauses that do not comply with the law are null & void and therefore unenforceable by law. It is a unique feature of law that invalid parts of an Agreement will not invalidate the whole Contract. The Contract then will be enforceable as if those invalid parts have never existed.

13. “ An Agreement is a Contract only when it is Enforceable By Law” Remember – If you did not get the answer right the first time around, it does not matter as the majority of even claims consultants did not get the test right. Nevertheless, you have acquired knowledge of the above, which incidentally is a very good start as the above statement underline what you need or have to know.

14. “ An Agreement is a Contract only when it is Enforceable By Law” It is interesting to note that what you have just learned have already been incorporated as the law in India. Kindly refer to the Indian Contracts Act 1872 which states at :- Section 2, Sub Section – (g) an agreement not enforceable by law is said to be void; (h) an agreement enforceable by law is a contract; (j) a contract which ceases to be enforceable by law becomes void when it ceases to be enforceable.

15. “ An Agreement is a Contract only when it is Enforceable By Law” In the other tutorials which makes up parts of this course, you will be educated on the Laws Of India paying particular attention to Construction Contracts. A short understanding of Stare Decisis , Case law, Common Law, Rules Of Equity, Natural Justice will be required to proceed further. This Training Course will undertake that. At the end of the course, you should have a good “Understanding of Construction Contracts”, and other salient features of Construction Contract Laws