PRESENTATION ON

CONTRACT ACT

PRESENTED BY- Dr. Karwan

Dana
Tishik University
2022
 ALL BOUT ME

Dr. Karwan Dana

Law Lecturer at Ishik University
Lawyer at Ministry of Natural Resources (RKG).
PH.D University Soran/ Wolverhampton, School of Law UK.2020
Masters in law University of Birmingham UK.2012
Bachelor University of Wolverhampton, School of Law, social
sciences communication UK.2010
Email: [email protected]
 WHY STUDY THE LAW OF BUSINESS?
Law is a fundamental part of business and business has always been
intertwined with the law and legal regulations, but these are becoming more
complex. As a result, business students often enter the corporate world
without a comprehensive understanding of the law or the role of legal
professionals in the creation and operation of a business

1.law designed to prevent harm or wrongdoing before it occurs.

2.How to avoid legal problems.
3.How to resolve problems quickly as they arise.
4. Active: identifying potential problems and participating in resolving
them.
5.Helps develop valuable decision-making skills. Can’t be expected to know
everything. Students who study the confluence of law and business can
predict their companies' legal needs and understand how laws and
regulations can have both positive and negative effects on companies.

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 Students may believe
• Students may believe that the most important legal
difficulties they will face in the business world will
be market or financial issues, yet many businesses
will face legal and regulatory challenges throughout
their lives. Most business professionals, for
example, will come across challenges relating to
trademark and patent laws at some point in their
employment; transnational corporations or those
involved in international trade may need to be
aware of and adhere to a variety of tax laws.
 business owners
• It’s important for business owners, managers, and
other professionals to have a basic understanding
of business law to help them make better decisions.
Just as there are laws that apply to people, there is
a huge body of law that applies to
business. Businesses need these laws for the same
reasons that people do: to define unacceptable
behavior, to provide certainty and stability, to
protect the public, and to provide a mechanism for
businesses to resolve disputes.
 Learning Objectives of this chapter
• What is business (law)
• What is a contract?
• What are the four basic elements necessary to a valid
contract?
• What elements are necessary for an effective offer
• How have traditional laws been applied to these
agreements?
• What is consideration? What is required for
consideration to be legally sufficient?

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 What Business law includes
• Business law is the body of law which
governs business and commerce and is often
considered to be a branch of civil law and
deals both with issues of private law and
public law.
• Commercial,law regulates corporate contract
s, hiring practices, and the manufacture and
sales of consumer goods
Furthermore Business Law
Business law is a rule which helps us to regulate and
manage our business transactions and activities system. It
has direct relation with trade, industry and commerce. e.g.
insurance act, contract act, tax act, sale of goods act, agency
act paper, negotiability, secured transactions, agency,
employment, and property law, as well as, laws regulating
business organizations
ORIGINS OF THE LAW OF BUSINESS
• The word ‘company’ is derived from the Latin word and the first type
of English organization to which the name company was applied was
merchant adventures for trading overseas. Royal charters conferring
privileges on such companies are found as early as the fourteenth
century, but it was not until the expansion of foreign trade and
settlement in the sixteenth century that they become common.
• Historically, began as a private system in England to influence
commerce.
• Originated in the English Law Merchant.
• Administered by Merchant Courts established in various merchant
guilds.

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 Modern law of business
• Today, the Law of Business focuses on
maintaining a competitive environment;
• Regulates specific marketing and
business activities

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 What is a Contract?
An agreement which is legally enforceable alone is a
contract. Agreements which are not legally enforceable
are not contracts but remain as void agreements which
are not enforceable at all or as voidable agreements which
are enforceable by only one of the parties to the
agreement.

“All contracts are agreements, But all agreements are not contracts.”
 Definition of a Contract
• A contract is an agreement that is
enforceable by a court of law or equity

• If one party fails to perform as promised, the

other party can use the court system to
enforce the contract and recover damages or
other remedy
 1. Article 133 of Iraqi civil law
Valid Contract
An agreement enforceable by law
when all the essential features of a
valid contract are present.
 Requirements of a Valid Contract
• A valid, enforceable contract includes:
– Agreement.
– Consideration.
– Capacity.
– Legality.
– Which we will talk about in more detail
further bellow

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 Parties to a Contract
• Offeror – The party who makes an offer to enter into a contract
• Offeree – The party to whom an offer to enter into a contract is
made

Offer
Offeror Offeree

Acceptance
Offeror makes an Offeree has the power
offer to the offeree to accept the offer and
create a contract
OFFER/PROPOSAL ACCEPTANCE PROMISE
Consideration sec 2(d) - When at the desire of the promisor, the promisee or
any other person has done or abstained from doing something or does or
abstains from doing something or promises to do or abstain from doing
something, such act or abstinence or promise is called a consideration for the
promise.
Price paid by the one party for the promise of the other Technical word
meaning QUID-PRO-QUO i.e. something in return.

Lawful object :The object of agreement should be lawful and legal.

Consideration or object of an agreement is unlawful if it
is forbidden by law; or
is of such nature that, if permitted, would defeat the provisions of any law; or
is fraudulent; or
Involves or implies, injury to person or property of another; or
Court regards it as immoral, or opposed to public policy.
AGREEMENT ENFORCEABLE BY LAW CONTRACT

An agreement enforceable by Law is a contract.

ESSENTIAL ELEMENTS OF A VALID CONTRACT
• Offer and acceptance
• Legal relationship
• Consensus - ad-idem
• Free consent.
• Capacity or competency of parties
• Lawful object
• Lawful consideration
• Certainty and possibility of performance
• Agreements not declared to be void
• Legal formalities
Consensus-ad-idem: The minds of both
the parties must be ad-idem. In other
words, the tow parties must have
agreed about the subject matter of the
contract at the same time and in the
same sense.
 ON THE BASIS OF CREATION

Express Contracts: Where the terms of the contract are expressly agreed
upon in words (written or spoken) at the time of formation, the contract
is said to be express contract.

Implied Contracts: Implied contracts in contrast come into existence by

implication.
Most often the implication is by law and or by action.
 Notion of Free Contract

The parties must have entered into the agreement

freely.

The purpose of the agreement must not be illegal

or contrary to public policy.
 Form of Contracts

1) Written

2) Oral

3) Partly oral and written

 Capacity
The parties must be legally capable of entering into a contract.
Capacity : The parties to a contract must have capacity (legal ability) to make
valid contract.
Section 2:- of the Iraqi contract Act specify that every person is competent to
contract provided.
 Is of the age of majority according to the Law which he is subject
 Who is of sound mind and
 Is not disqualified from contracting by any law to which he is subject.

5) Absence of Vitiating factors

Absence of factors that are going to invalidate a contract, ie : duress or undue
influence, mistake, misrepresentation, illegality
Next chapter
 1 valid contract

1. Most contracts only need to contain two elements to be

legally valid:
2. All parties must be in agreement (after an offer has been
made by one party and accepted by the other).
3. Something of value must be exchanged -- such as cash,
services, or goods (or a promise to exchange such an item)
-- for something else of value.
2 Voidable contracts
• A voidable contract will functions as a valid contract unless
and until one of the parties takes steps to avoid it.

• Anything obtained under the contract must be returned,

insofar as this is possible.

• If goods have been resold before the contract was avoided,

the original owner will not be able to reclaim them.
 2. Voidable Contract

A contract becomes voidable when the consent

is not free.
Usually a contract becomes voidable when the
consent of one of the parties to the contract
is not free.
Eg- A, threatens to shoot B if he does not sell his
bike to A. B agrees. This contract is voidable
at the option of B
Voidable contract Section 2[i] : Defines that an agreement which
is enforceable by law at the option of one or more parties but not at
the option of the other or others is a voidable contract.
Result of coercion, undue influence, fraud and misrepresentation.

Unenforceable contract : Where a contract is good in substance

but because of some technical defect cannot be enforced by law is
called unenforceable contract. These contracts are neither void nor
voidable.
Example: Writing registration or stamping.
 3. Void Contract Art 137
• A void contract is the contract that has no legal effect at all.
“ A contract which ceases to be enforceable by law becomes
void, when it ceases to be enforceable by law.”
Void contracts
• the whole transaction is regarded as a nullity, as though as there has
been no contract between the parties.
• Any goods or money obtained under the agreement must be returned.
• Where items have been resold to a 3rd party, they may be recovered by
the original owner.
Illegal contract : Contracts those which are forbidden by law. All
illegal contracts are hence void also, because of the illegality of their
nature they cannot be enforced by any court of law. In fact even
associated contracts cannot be enforced. Contracts which are
opposed to public policy or immoral are also illegal.

“All illegal agreements are void agreements but all void agreements are not
illegal.”
 ON THE BASIS OF LIABILITY

Unilateral contract : A unilateral contract is one in which only one

party has to perform his obligation at the time of the formation of
the contract, the other party having fulfilled his obligation at the
time of the contract or before the contract comes into existence.
 

Bilateral contract : A bilateral contract is one in which the obligation

on both the parties to the contract is outstanding at the time of the
formation of the contract. Bilateral contracts are also known as
contracts with executory consideration.
 Gift Promise
• Gift promises (free promises) are
unenforceable because they lack
consideration

• A “completed gift promise” becomes a true

gift, which by definition is irrevocable
 Article 620 of Iraqi civil law
• The grantor may revoke the gift with the
consent of the grantee; if the grantee does
not consent the grantor has a right of
revocation when a reasonable cause has been
realised if there is no obstacle against
revocation.
• See art 623 eg. After , marriage or after one
die or is the person got something in returned
either money of any other material facts
 Classifications of Contracts:
Formation (1 of 2)
1. Bilateral contract – a promise for a promise

2. Unilateral contract – A promise for an act

3. Express contract – A contract expressed in

oral or written words

4. Implied-in-fact contract – A contract inferred

from the conduct of the parties
 Bilateral & Unilateral
Bilateral contracts
• A promise by one party in exchanged for a promise by another
party
• A one to one contract

Offeror Offeree
The person who The person to whom
make the offer the contract was made

Example : Sale of goods contract

• The Buyer promises to pay the price
• The Seller promises to deliver the goods
Unilateral contracts
• A promise by one party in exchanged for an action by
another party
• A one to all contract

1 Offeror Many
Offerees

Example :
X promises a reward to anyone who will find his lost wallet.
X bound himself to the promise, but no one is bound to search for
the lost wallet. But if Y, having seen the offer, recovers the wallet
and returns it, he is entitled to the reward.
 Classifications of Contracts:
Enforceability
1. Valid contract – A contract that meets all of
the essential elements to establish a contract
2. Voidable contract – A party has the option of
voiding or enforcing the contract
3. Void contract – No contract exists
4. Unenforceable contract – A contract that
cannot be enforced because of a legal defense
THANK YOU
HAVE A FABULOUS DAY 