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Unit 1: Law of Contract

A unilateral contract is one wherein at the time the contract is concluded there is an obligation to Notes
perform on the part of one party only.

Example: A makes payment for bus fare for his journey from Mumbai to Pune. He has
performed his promise. It is now for the transport company to perform its promise.
A bilateral contract is one wherein there is an obligation on the part of both to do or to refrain
from doing a particular thing. In this sense, bilateral contracts are similar to executory contracts.

An important corollary can be deduced from the distinction between executed and executory
contracts, and between unilateral and bilateral contracts. It is that a contract is a contract from the
time it is made and not from the time its performance is due. The performance of the contract can
be made at the time when contract is made or it can be postponed either in full or in part.

Case Study Robinson Contract

obinson, a college football player, signed a contract on December 2 with the Detroit
Lions, a pro football club. The contract was a standard form that contained a clause
Rstating, “This agreement shall become valid and binding upon each party only when
and if it shall be approved by the League Commissioner.” In late December, Robinson
informed the Detroit Lions that he would not be playing for them because he had signed on
with the Dallas Cowboys. On January 12 the commisioner approved the contract. Detroit
then sued Robinson for breach of contract.
Question

Was there ever a contract between Robinson and the Detroit Lions? Why or why not?
Answer
When Robinson signed the contract it was subject to the approval of the comissioner.
This was an express condition precedent and by Robinson signing, he has an implied
good faith effort to allow the commisioner the opportunity to accept. Robinson’s power
of revocation was temporarily suspended while he was waiting to be approved by the
comissioner. His later revocation is considered a antipatory repudiation. Subsequently,
when the commisioner approved the contract, it was binding and Robinson’s repudiation
can be considered a material breach by the Detroit Lions.
Source: http://www.askmehelpdesk.com/corporate-law/case-study-breach-contract-11531.html

1.7 Summary

z Mercantile Law may be defined as that branch of law which prescribes a set of rules for the

governance of certain transactions and relations between: (i) business persons themselves,
(ii) business persons and their customers, dealers, suppliers, etc., and (iii) business persons
and the state.
z A business person can resort to various judicial and quasi-judicial authorities against the
government in case his legal rights have been violated.
z The basic principle underlying law of contracts is that a stranger to a contract cannot
maintain a suit for a remedy. The law entitles only those who are parties to the contract to

file suits for exercising their rights. This is known as ‘privity of contract’.

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