Page 37 - DCOM404_CORPORATE_LEGAL_FRAMEWORK
P. 37
Corporate Legal Framework
Notes 4. A valid contract results from identical cross offers.
5. Performance of the contract may be made only by the parties to the contract.
Fill in the blanks:
6. A .................... is an agreement, enforceable by law, made between at least two parties by
which rights are acquired by one and obligations are created on the part of another.
7. An offer, implied from the conduct of the parties or from the circumstances of the case, is
known as ....................
8. A prospective shareholder by filling up a share application form, usually attached to the
prospectus, is making the offer. An .................... at the time of auction inviting offers from
the bidders is not making an offer.
9. .................... are those for which the law does not require a particular set of formalities or
special language.
10. .................... consists in the improper exercise of power over the mind of one of the
contracting parties by the other.
1.13 Review Questions
1. Define contract. Why must you, as a manager, know as to what constitutes a contract?
2. Define offer. Distinguish between offer and invitation to offer.
3. When does mental incompetence prohibit a valid contract? Is minor competent to
contract?
4. “A minor’s estate is liable for necessaries of life supplied”. Comment.
5. What is meant by ‘unilateral mistake’?
6. The term consideration is used in the sense of ‘quid pro quo’ or ‘something in return’. Does
this ‘something’ to be necessarily in terms of money? Illustrate your answer.
7. “Insufficiency of consideration is immaterial but an agreement without consideration is
void”. Comment.
8. Discuss the reasons due to which the offer lapses or is revoked. If no time is fi xed by the
offeror within which the offer is to be accepted does the offer remain open for an indefi nite
period of time?
9. Explain the meaning of undue influence. When is it presumed as regards persons in
particular relationships?
10. What are the main types of remedies for breach of a contract?
Answers: Self Assessment
1. False 2. True
3. False 4. False
5. False 6. contract
7. implied offer 8. auctioneer
9. Informal contracts 10. Undue infl uence
32 LOVELY PROFESSIONAL UNIVERSITY
