Obligations and Contracts
From promise to remedy
This domain tests the life of an obligation: formation, performance, breach, and extinction. Master contract formation (offer, acceptance), validity (capacity, consent, object, form), and effects (binding force, good faith).
Concepts you must know
- Sources of obligations: contract, tort, unjust enrichment, negotiorum gestio.
- Invalidity: nullity versus voidability; rescission for error, fraud, duress.
- Performance, delay, impossibility; creditor's default.
- Remedies: specific performance, damages, penalty clause, termination.
- Assignment, set-off, novation, limitation of actions.
Traps
- Confusing nullity (no effects) with voidability (valid until rescinded).
- Forgetting that damages require breach, loss, causation, and foreseeability.
- Treating a penalty clause as automatically payable regardless of loss.
- Missing that termination requires notice or judicial decision where the law so provides.
Worked example
A seller delivers defective goods. Rule of thumb: the buyer may demand repair, replacement, price reduction, or termination, plus damages. Check notice deadlines and limitation; the burden of proving the defect lies on the buyer, while the seller may invoke exemption.
Rule of thumb
Ask: is there a valid obligation, was it breached, what loss followed, and what remedy is proportionate?