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Contract

Contract  (Agreement) in the Egyptian Civil Law:

  • The Agreement is defined as:

“It is the consensus of mutual consent to create, transfer, modify or terminate an obligation.”

And the Egyptian Court of cassation defines it as: “Every agreement that aims to create a legal effect.”

Moreover, the Egyptian Supreme administrative Court defines it as: “It exists once two consents aim to give place to a specific legal effect which is creating an obligation or modifying it.”

Therefore, a contract is a consensus between two wills to create a particular obligation as the Law defines a contract by: “An agreement whereby one or more persons are bound towards one or more other persons to grant, act or to not do something.” And as stated in article 147 from the same law, “Pacta sunt servanda (the contract is the law of the parties). It cannot be revoked or altered except by mutual consent of the parties or for reasons provided by the law”.

  • Commercial contract:

The commercial contract: According to the law, it is difficult to adapt a specific definition for commercial contracts, whereas each contract mentioned in the Civil Law is permissible to be used in the commercial field, one of the characteristics of the commercial contracts that they are consensual and commutative contracts thus, each party to the contract must have a return for what it afforded moreover, the third characteristic is that the commercial contract mainly is applicable to movable properties in addition to that, the Commercial Law doesn’t contain general rules for commercial contracts therefore, as a principle such rules are subject to the Civil Law.

  • The elements of a contract:
  • Consent: The consent is considered a substantial element of the contract’s elements according to the Civil Law. The existence of consent is achieved through the convergence of the offer and acceptance which means the consensus of contractors’ wills, and as a principle the contracting party should express about his intent by himself however, the contracting party may appoint an agent to act on behalf of him, and this is calling proxy in concluding contract;

  • Subject matter: The object is considered the legal process needed to be achieved by concluding the contract, as well as there are certain conditions shall be available in the object:

 

First: The object should be in a specified amount of money, therefore in the financial dispositions, the money has to be determined in a certain way to negate ignorance. 

Second: The object should be possible; such condition is required as for the normal course of matters. Thus, it is not permissible for the object of the contract to be impossible to achieve.

Third: The object should exist already and not to be existed in the future, and eventually, the object should be determined or capable to be determined.

  • Reason: The reason is considered as the last element regarding the elements of contract in the civil law, the consideration is defined as “It is the direct desire in which both of the contracting parties endeavor to achieve it from the contract, i.e. the reason behind the seller’s obligation to transfer the ownership of the sold property is to gain the price, furthermore, the cause should be lawful and not contradict with public order.

Conditions of the legality of the contract:

  • The legal capacity: the capacity to act is obligatory for both contractual parties.

  • Contractual liability:

After mentioning the elements of the contract as set out in the Civil Law, it is necessary to know that the sanction applicable in infringing the terms

 that included in the contract, whereas both of the contracting parties are obliged to perform their obligations, and in case of breach, the defaulting party shall be liable to compensate the other party for damage result of breach of the terms listed in the contract, such liability is called the contractual liability which defined as ” The sanction that entailed by breaching of the contractual obligations“. With regard to compensation, it is either in cash or in kind, if possible, moreover, the compensation includes the loss which incurred to the aggrieved party in addition to compensating him for profits that would have been earned unless this breach.