13 june, 2019
Maadada: Contracts law (Su’aalo & Jawaabo)
Guddigga Wacyi-gelinta & Tacliinta oo ka kooban:
1. Abdulkadir Abdi Ahmed “Kanaale” ……………………..………….Guddoomiye.
2. Maqsud Mohamed Hasan…………………………………………………………..Xubin.
3. Muscab Abdirahman ………………………………………………………………….Xubin.
4. Naema Abdi Siyad………………………………………………………………………Xubin.
5. Abdulxaq Ibrahim Mohamed………………………………………………………Xubin.
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Topic one: Law of contract (Proposal & Acceptance)
1) What is a contract?
A contract is an agreement that binds the parties who enter into it and it can be enforced
against one another .Examples of contracts include in: contract to sell and purchase land,
a contract of leasing, an insurance contract etc.
2) Are all agreements contract and what is the reason?
Now, all agreements are not contracts but all contracts are agreements; the reason is
being that there are social agreements or agreements b/w family members. Such
agreements are not considered contracts because they are not intended to bind the
parties in law.
3) What are the two main categories of contracts?
These are:
The simple or consumer contracts and
The commercial contracts.
4) What is the core of a typical contract?
The core of typical contract is the exchange of things: One party gives something to
another party and receives something in return.
5) Most definitions of contract law usually refer to four elements, which are they?
The elements of most definitions of contracts include in:
An
agreement
By t wo or
more parties
containing
Promises by
each party
Which are intended to
be enforceable by law
6) What is a contract law?
Contract law is set of rules and principles that governs transaction among parties thereby
setting the rights and obligations of these parties.
7) What are the sources of contract?
Contract is made up of a large numbers of different rules. Distinction is made on the basis
of the origins of the rules. There three types of rules relevant to contract law:
a) Rules that are made by the contracting parties themselves.
b) Rules that emerge from the official National, international, European and
supranational sources. and
c) Informal rules that are made by other None-state organizations and academics.
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8) What is “laissez faire”?
Laissez faire is an economic philosophy that holds a strong emphasis on in dualism and
enterprise which had profound influence on the law of contract. In other word “lasses
faire” is an economic system in which transactions between private parties are free from
government intervention such as regulation, privileges, tariffs and subsides. The phrase
lasses-faire is part of a larger French phrase and literally translates to “let you do” but in
this context usually means “let go”, leave alone”, allow to do” etc.
9) Laissez faire consists of two factors, what are they?
a) The courts consider that the parties to a contract had complete freedom to lay down
their own terms.
b) Once formal, the contract in the eyes of the law, was sacred and should be uphold at
all costs.
10) What the criterion is for the legal enforceability of a promise?
All modern jurisdictions accept that the main criterion for the enforceability of a promise
is the intention of the parties to enter into a legal relationship. Actually the law decides
when such an intention exists which when there is a reciprocal will between the offeror
and the offeree.
11) What are the elements of contracts? & define each one of them?
In order to form an agreement enforceable by the law, the following elements must exist:






Proposal or offer: When you signify your willingness to be bound by a contract
with the other party.
Acceptance: When you agree to accept the offer or proposal made by the other
party who makes the proposal.
Consideration: A value to be paid for a promise made
Intention to create a legal relationship: Every party to a contract must have the
intention to create a legal relation.
Capacity to contract: Every party to a contract must have the capacity to enter
into a contract.
Free consent: Every party must enter into a contract with free consent; the
consent must not be secured through fraud, coercion, undue influence,
misrepresentation or mistake.
12) When can a proposal amount to an offer? According to article 2:201 section 2 of the
principle European contract law (PECL). it says that a proposal amounts to an offer:
a) If it is intended to result in a contract when the other party accepts it.
b) If it contains sufficiently definite terms to form a contract.
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13) To whom can a proposal be made?
A proposal can be made to:
a) A specific or particular person and such proposal can be accepted by by that person
only.
b) A proposal ca be also made to the public. In such situation, the acceptance can be
made by any person from the public who knows about the proposal and performs the
obligation as required by the proposer.
14) What is the difference b/w the proposal and an invitation to treat?
An invitation to treat comes before the proposal is put in place and it consists of the
negotiations on bargaining about the deal. While the proposal is a plan or suggestion,
especially a formal or written one, put forward for consideration by others.
15) In order to make the proposal to be effective. What conditions are necessary to exist?
The proposal must be clear and communicated well. A proposal which is vague or
uncertain may not lead to a binding contract.
16) Can the offeror go back on his offer before acceptance of the offeree (revocation)?
Yes, in the majority of jurisdictions adopt that the offeror can revoke its offer before
acceptance by the offeree. In other words, when the proposer communicated the
revocation of the proposal to the other party before its acceptance
17) What is a revocation of a proposal?
Revocation of proposal is the action against the formation of the proposal mainly by
proposer or offeror.
18) Which are the certain situations in which a proposal is revoked?
These situations are four as follows:
1. When the proposer communicated the revocation of the proposal to the other party
before its acceptance.
2. By the lapse of the time prescribed in the proposal for it’s accepted.
3. Where the acceptor fails to fulfill a condition precedent to acceptance. Such as the
condition set by an employer for its applicant.
4. By the death or mental disorder of the proposer.
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19) When the acceptance of an offer leads to a binding contract?
Article 2:205 of (PECL) reflects the rule that many jurisdiction accept:
“If an acceptance is has been dispatched by the offeree ,the contract is concluded when
the acceptance reaches the offeror” This rule applies in the electronic communication ,in
which case the acceptance is supposed to have reached the offeror if the message has
entered in his electronic mailbox.
20) When and where the contract will be concluded, if the parties are in separate areas?
The agreement between two persons who are in separate areas, will be concluded in the
place and time where and when the proposer or offeror, becomes aware of it or gets the
knowledge of that acceptance; only if it is not found another agreement or another legal
rule which indicates in a different way (Art. 96/1)
21) To determine whether acceptance exists or not what are the important rules for
acceptance?
a) Acceptance must be absolute and unqualified.
b) Acceptance must be communicated.
A very important articles in Somali Civil Code, about acceptance
Article 94 expresses that:
“If the two parties agree on the important terms of the contract and they postpone the
supplementary issues that will not be part of the conditions for the formation of the contract,
the agreement will conclude, if the parties don’t agree in a different option.
If a conflict arises from those simpler issues that were not agreed upon previously, or is not
manifested by the new behaviors, the relevant court will decide upon it, meanwhile giving
considerations to the general interest of the parties and the nature of the agreement .
Also Article 95 of the Somali civil code states that:
“If the acceptance does not comply with the proposal, it will become refusal together with a
new proposal”.
Article 96 of the Somali civil code, states:
Section 1: ”The agreement between two persons who are in separate areas, will be concluded
in the place and time where and when the proposer or offeror, becomes aware of it or gets the
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knowledge of that acceptance; only if it is not found another agreement or another legal rule
which indicates in a different way.
Section 2: It is assumed that the person, who made the proposal, gets the knowledge of the
acceptance in the place and time (where and when) the acceptance has reached him.
Article 97 c.c.s. section says:
Section 1:
If it is stated in the ;proposal or is understandable from the conditions and customs of the
bilateral conducts ,that the proposer does not want to wait for the acceptance, the agreement
will be formed if the proposal is not rejected in an appropriate time.
Section 2:
The silence is equivalent to acceptance if the proposal is revered to a relation to an affair
already existence between the parties.
22) In the postal rule, there are exceptions of communication of acceptance, which are they?
a) As against the proposal; when the acceptance is posted in the mail box by acceptor.
b) As against to the acceptor; when it comes to the knowledge of the proposer.
23) How will it occur the acceptance of unilateral contracts?
The rules relating to acceptance must be modified in their application to unilateral
contracts:
a) One modification is that the rule for requirement of communication is omitted here.
b) The second issue is the identification of the act that constitutes the acceptance. In this
case, the performance of the required action in its entirety is sufficient.
c) A third issue relates to the time at which the offeror can withdraw his offer. The better
rule might be to say that the offeror can’t withdraw his offer once performance has
begun but that he is not obliged to honor his promise to make the payment until the
other party has fully performed the act for which payment was promised.
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Topic two: consideration (Value of contract)
24) What is a consideration?
Consideration is the value that someone has to pay, in order to the promise by a
promisor. In other hand it is a price that you pay to buy a promise or an act of the other
person.
25) What is the general rule of consideration?
The general rule of consideration is any agreement made without consideration is void.
26) What are the differences between executory, executed and past consideration?
a) Executory
(In bilateral contracts) Executory is reciprocal or mutual promise made by the parties of
the contracts. In other hand, executory is when one promise is made in return for another
promise.
b) Executed
(In unilateral contracts) Executed is an act wholly performed at the time the contract is
mad. In other hand, consideration may be executed when one promise is made in return
for the performance of an act.
c) Past consideration
(In unilateral contracts) It is something already completed before the promise is mad –
NOT Valid consideration in the eye of law. If a promise is made in return for an act that
has already been performed, that act is regarded as past consideration.
27) Can past consideration support a claim in contract?
No, in common law countries. It will not support a claim in contract, because the act
which was performed before the promise of reward was made is regarded as gratuitous
(Done without good reason).
But Yes, in some civil law countries. past consideration is valid and support if it is done.
28) What are the exceptions available to general rule of consideration?
With these exceptions, even though the agreement is made without consideration, the
agreement is still valid and will be enforceable. The exceptions include the following:
Agreement made on account of natural love and affection.
Agreement to compensate a past voluntary act.
Agreement to pay a statute-barred debt.
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29) What are the conditions required in an agreement to made an account of natural love
affection?
 The agreement is made in writing.
 The agreement is registered under the existing law which requires its registration; and
 The agreement is made on account of natural love and affection between the parties
standing in near relation to each other.
30) What are the important conditions required in an agreement to pay as statute-barred
debt?
 The debtor makes a fresh promise to pay the statute-barred debt; and
 The promise is made in writing and signed by the person to be charged or his
authorized agent.
Topic three: Intention to create legal relations
31) What is the intention of the parties?
The intention of the parties is the main criteria for the formation of the contract
determination is the intention; this contracts of proposal and acceptance.
32) How does the law determine of an intention in any agreement between two parties?
The law has divided an agreement into two categories:
 Domestic, family and social agreements and
 Business agreements.
33) What is the presumption on intention to create legal relations in a domestic, family and
social agreement?
The presumption on intention to create legal relations in a domestic, family and social
agreement is no legally bind and unenforceable.
34) Must the words used by in their arrangement be certain and unambiguous?
Yes, it must be certain, otherwise the contract becomes revocation.
35) What is the presumption on intention to create legal relations in a business or commercial
agreement?
The presumption on intention to create legal relations in a business or commercial
agreement is legally bind and enforceable.
36) Is there any reason for the parties of a business transaction to say that they do not have
the intention to be bound by their arrangements?
Yes, when there is honorable contract and when the subject to the formal contract.
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37) How does the clause “subject to contract” render the agreement to be unenforceable?
Unless the subsequent formal contract is entered by the parties.
Topic four: Capacity to contract.
38) What are the conditions or requirements for a person to enter into a contact?
These are two elements of requirements namely
 Majority
 Sound mind (healthy mind)
39) Define Minors and state its general rule.
A minor or an infant is a person who is below the age of majority. Under the age of
majority act is 18 years. The general rule is that all contracts entered into by a minor are
void.
40) State & define the exceptions available to contracts entered into by a minor.
Exceptions to minors:
1. The age of maturity rules (including the matters relating to marriage, divorce,
adoption, religion and religious rites).
Include:
 The capacity of any person to act in matters relating to marriage ,divorce and
adoption.
 The religion and religious rites
 Any other written law fixing the age of maturity.
2. The contracts for necessaries.
Include:
 The necessaries have been supplied to a minor.
 The minor is also liable for necessaries supplied to his dependents (wife and
children).
 The supplier of necessaries may only claim for reimbursement (reasonable
price)
 The minor is not personally liable and this means he is liable to pay only if he
has the property to do so.
3. The contracts of scholarships.
Scholarship has defined as any contract or agreement between an appropriate
authority and person with respect to:
 Scholarships
 Award
 Bursary
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 Loan
 Appointment to a course of study
 Facility for the purpose of education or learning
Appropriate authority means Federal government, a state government, statutory
authority or an educational institution
4. Contracts of insurance:
A minor over the age of 10 may enter into contract of insurance but if he or she is under
the age of 16 years, the written consent of the parents or guardians is essential
Topic Five: Free consent to contract.
41) What are the factors the effect an agreement of the parties after has been formed?
a. Coercion
b. Fraud
c. Undue influence
d. Misrepresentation
e. Mistake
42) What is the meant by coercion?
Coercion: means committing or threatening to commit any forbidden act by the penal
code or unlawful detaining threatening to detain any property to the prejudice of any
person to the intention of causing to enter into agreement.
43) What is the meant by Fraud?
Fraud: refers to acts committed to a contract with the intent to deceive the other
contracting party
44) What is the meant by undue influence?
Undue influence: is the relationship subsisting between the parties are such that one of
the parties is in a position to dominate the will of the other and uses that position to
obtain unfair advantage over the other.
45) What are the two important aspects or factories that bring the undue influence?
a. The domination of the will of the person by other
b. Obtaining an unfair advantage
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46) When a person is said to be in a position to dominate the will of another?
a. Real or apparent authority
b. A fiduciary relation
c. Mental capacity is temporary or permanently affected by reason of age, illness, or
body distress
47) What are the five elements to bring about fraud:
a. The suggestion as fact of that which is not true by one who does not believe it to be
true
b. The active concealment of a fact
c. A promise made without any intention of performing
d. Any other act fitted to deceive
e. Any such act or omission as the law specially declares to be fraudulent
48) What is misrepresentation?
Misrepresentation: refers to an untrue statement made by representor and that induces
the other party to inter into contract.
49) What is mistake?
Mistake: means a mistake as matter of fact by one party or both contracting parties and
mistakes as to any law in force or not force.
50) State the elements that brings about misrepresentation:
a. The positive assertion, in manner not warranted by the information of the persons
making it, of that which is not true thought he believes it to be true
b. Any breach of duty which without to deceive gives an advantage to the person
committing it
c. Causing innocently
51) What are the effects of coercion, undue influence, fraud, and misrepresentation?
There are all voidable at the option of the party whose consent was so caused.
52) What are different b/w consensual contracts and real contracts?
Consensual contract are such as are founded upon and completed mere agreements of
the contracting parties.
Examples of consensual contracts include in:
a) an agency agreement b) a sale agreement c) partnership agreement d) letting or hiring
agreement.
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While Real contracts are those in which it is necessary that there should be something
more than more than mere consent such as loan of money, deposit, or pledge, which
from their nature require a delivery of the thing.
Topic Six: Contracts forbidden by law (Void and illegal contracts)
53) What are the contracts forbidden by law?
 Illegal contract
Include:
Alcohol
Drugs
Abortion
Wagering / gumbling
Baby selling
Human trafficking
Eating pork meat
 Fraudulent contract
Include:
Wager
Money laundering
Theft
Lie
Smuggling goods
Falsification
 Contract injurious to person or property of another
Include:
Robbery
Violence
Injuring people
 Contracts immoral or against public policy
Include:
Contracts which are sexually immoral
 Other void contracts
Include:
 A contract is void if the consideration for one or more objects is in
part unlawful.
 A contract made without consideration is void except in the
following circumstances.
 A contract in restraint of marriage of a person other than a minor
is void.
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



A contract in restraint of trade, profession or a business is void
except in certain limited circumstances.
A contract in restraint of legal proceedings is void except
contracts to refer to a dispute to arbitration and certain written
contracts relating to award of scholarships by the government.
A contract that is uncertain is void.
A contract by way of wager is void except a subscription or
contribution made in favor of certain prizes for horse – racing.
54) When does the consideration or an object of a contract become unlawful?
- Forbidden by law:
Where the object or the consideration of an agreement is the performance
of an act which is forbidden by law, the agreement is void.
- Defeat the purpose of provision of any law:
Though the object or consideration for agreement, sometimes not directly
forbidden by law, they are still forbidden if it is nature defeats the purpose
of provision of law. Agreement with such an object or consideration is void.
- Fraudulent:
An agreement, the object of which is to defraud others is unlawful and
void.
- Injurious:
Any agreement that implies or involves injury to person or others property,
it is deemed unlawful and therefore void.
- Immoral:
If the object or consideration of an agreement is opposed to morality, it is
void.
- Agreements opposed to public policy:
If the law regards the agreement as opposed to public policy, it is void.
55) What kinds of contracts are regarded as against the public policy?
 Contracts prejudicial to the public service
 Contracts obstructing the course of justice.
 Contracts against the interests of the state
 Contracts prejudicial to the freedom and stability of a marriage
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Topic Seven: Classification of contract
56) State the five common classifications of contracts?
a. Simple oral or written contracts, e.g. selling and buying goods in the market. &
formal agreement contracts or complex / commercial contracts, e.g. rent and
lease, shareholders agreement, employees contracts, government contracts, etc.
b. Contracts based on formation.
c. Contracts based on nature of consideration.
d. Contracts based on execution.
e. Contracts based on validity.
57) State the four different types of classifications of contract in Somali civil code?
a.
b.
c.
d.
Contracts related property (Ownership).
Contracts related to utility usage of property.
Contracts related prestation of services.
Contracts of games.
58) State the three types of contracts based on formation?
a. Express contracts:
It is said to be express contracts, if the terms of contracts are expressly agreed
upon between the parties at the time of formation of the contract.
b. Implied contracts:
It is one for the proposal or acceptance is made otherwise than in words.
c. Quasi-contracts:
It is one which is created by law.
59) What are the two types of contracts based on the nature of consideration?
a. Bilateral contracts:
A contract is said to be a bilateral contract, where the obligations of both parties
to the contract are pending at the time of formation of the contract.
b. Unilateral contracts:
It is also called one-side contract, it is only one party has to satisfy his obligation
at the time of formation of contract.
60) What are the types of contracts based on execution?
A. Executory contracts:
It is a reciprocal or mutual promise, on in bilateral contracts.
B. Executed contracts:
It is a unilateral contract, that contract is an act wholly performed at the time the
contract is made.
C. Past consideration: it is a unilateral contract that already complete before the
promise is mad – not valid past consideration in the eye of law.
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61) What are the contracts based on validity?





Valid contract: meets all the essential legal elements.
Void contract: lacks some or all of the essential legal elements.
Voidable contract: appears to be valid, but may be rescinded or disaffirmed by
one or both parties based on some legal principle.
Unenforceable contract: appears to be valid, but neither parties can sue (accuse)
the other performance.
Illegal contracts: it is, if it involves doing something that is a criminal act or civil
wrong or against the public good.
62) Which are the type’s bases on the size of the business?
 Solo or entrepreneurship
 Partnership (minimum number of members are 2, and the maximum number of
members are 20/50)
 Co-operatives
 Companies (2 members can establish when it is private company and 7 members
also can establish when it is public company).
63) What is the meaning of quasi-contracts?
A quasi-contract is the contract that is created by law/court. Not by an agreement made
by the parties to the contracts.
For example:
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