Theory question 110
Law of ContractCommerce 2 (answer any five questions)
(a) What is a contract?
(b) Explain six reasons for which a contract can be terminated.
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(a) A contract is a legally binding (enforceable) agreement between two or more parties, made by offer and acceptance, with consideration, capacity, intention to create legal relations and a legal object.
(b) Any six, explained: performance – both parties do what they promised; agreement – the parties agree to end it or replace it; breach – one party fails to perform, so the other may end it and claim damages; frustration – an event beyond the parties' control makes performance impossible (e.g. destruction of the goods, death); lapse of time – the contract was for a fixed period which has expired; operation of law – death, bankruptcy or insanity of a party, or a change in the law making it illegal; rescission because of misrepresentation, fraud, mistake or duress; merger into a higher contract.
Define with its elements; explain each way of ending a contract.