Question

1. Distinguish between a joint contract and a several contract. Give an example of each.

2. Explain why a stock purchase agreement is not a wagering contract.

Answer 1

Question 1)

Joint contract is a contract where two or more individuals/parties are held legally responsible for a specific obligation such as debt, or damages to propetry, or delay in completing the project. A joint contract is created when all parties involved sign a written contract that makes them equally/jointly liable. Joint liability applies even if either of the parties concerned is not responsible for the obligation.

Example, suppose four partners are in joint venture for constructing a bridge. Suppose later the bridge collapses and it was found that the design portion provided by the 1st partner failed. In this case all four partners are liable and will have to face legal consequences even though the incorrect design was provided by the 1st partner.

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Several contract - A several contract is one signed by two or more parties, but in which all parties are responsible only for their respective portion of liability/oblidation/damage. A several contract maybe seen as a fairer way to divide obligations among involved parties as this ensures that only the ones responsible for the obligation will have to pay for it or will only have to pay for the portion of the obligation that they are responsible for.

Taking the same example as above. if the contract with the 4 partners was signed as a several contract, then only partner 1 is likely to face legal consequences and held liable for the incorrect design.

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Sorry Im not sure about the 2nd question. Kindly post it separately, and I will try to answer.

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