02: Termination of contract. Flashcards
Severable contract.
A contract, such as a building contract, that provides for payment at various stages of the contractor’s progress.
A contract, such as a building contract, that provides for payment at various stages of the contractor’s progress.
Severable contract.
A severable contract is also known as a … contract.
divisible
T/F: in a totally frustrated contract in which neither party has incurred any losses a deposit must be forfeited.
FALSE
T/F: in a totally frustrated contract in which neither party has incurred any losses a deposit must be returned.
TRUE
T/F: in a totally frustrated contract in which neither party has incurred any losses the balance need not be paid.
TRUE
In a totally frustrated contract in which neither party has incurred any losses …
any deposit must be returned and any balance need not be paid.
T/F: Anticipatory breach may be inferred from conduct.
TRUE
T/F: Anticipatory breach must be explicit.
FALSE
It can be inferred from conduct.
A victim of a breach of condition …
may treat the contract as discharged and sue for damages.
Damage not ‘too remote’ must be that …
arising naturally from a breach
OR
in the reasonable contemplation of both parties
T/F: damages for breach of contract are primarily intended to restore the injured party to the same position they were in at the time when the contract was made.
FALSE
Damages are intended to put the party in the position they would have been had the contract been performed.
Damages are intended …
to put the party in the position they would have been had the contract been performed.
T/F: A claimant is required to take every opportunity to mitigate their loss arising as a consequence of a breach of contract.
FALSE
A claimant is required to take only reasonable steps, not ones that carry undue risk or are discreditable.
In assessing the amount of damages, it is assumed that a claimant will take …
all reasonable steps to mitigate their loss.
A liquidated damages clause will not be enforced by the court if …
it is considered penal in nature.
i.e. out of all proportion to any legitimate interest of the injured party.
A vendor suffering breach of contract by a buyer in respect of a unique item, for example a rare sports car, who subsequently sells the car to an alternative buyer at a higher price …
will be able to claim only nominal damages since no loss has been suffered.
A vendor suffering breach of contract by a buyer in respect of an everyday item, for example a car in plentiful supply, who subsequently sells the car to an alternative buyer at a higher price …
may still claim for damages in respect of lost profits from the original buyer.
A liquidated damages clause is only valid if …
it is not penal in nature and protects the legitimate interest of the injured party.
T/F: Specific performance is awarded at the discretion of the court where damages would not be an adequate remedy.
TRUE
T/F: Specific performance is likely to be more appropriate than damages in a contract involving personal services.
FALSE
equity rarely acts in personam. There is also the issue of supervision.
T/F: Specific performance is likely to be awarded in a contract for the sale of land.
TRUE
Specific performance is likely to be awarded in a contract for the sale of …
land
T/F: A mandatory injunction often has the same result as specific performance but is less common.
TRUE
A … injunction often has the same result as specific performance but is less common.
mandatory
A mandatory injunction often has the same result as … but is less common.
specific performance
A party breaching a restrictive covenant within a contract is likely to suffer a … if the other party sues on the contract.
prohibitory injunction
UTCA (1977) statutory test of reasonableness:
Whether it is FAR* with regard to ATC which were or which ought to have been K to the parties when the contract was made.
fair and reasonable
UTCA (1977) statutory test of reasonableness:
Whether it is FAR with regard to ATC* which were or which ought to have been K to the parties when the contract was made.
all the circumstances
UTCA (1977) statutory test of reasonableness:
Whether it is FAR with regard to ATC which were or which ought to have been K* to the parties when the contract was made.
known
UTCA (1977) statutory test of reasonableness: FAR* ATC KTP TCWM
fair and reasonable
UTCA (1977) statutory test of reasonableness: FAR ATC* KTP TCWM
all the circumstances
UTCA (1977) statutory test of reasonableness: FAR ATC KTP* TCWM
known to parties
UTCA (1977) statutory test of reasonableness: FAR ATC KTP TCWM*
time contract was made
T/F: In a contract between two businesses, a clause which limits liability for losses due to negligence is void, however reasonable it might appear.
FALSE
only clauses attempting to exclude liability for death or personal injury resulting from negligence are void.
The Unfair Contract Terms Act (1977) makes clauses attempting to exclude liability for … void.
death or personal injury resulting from negligence
T/F: A clause limiting liability for personal injury resulting from negligence in a contract between two private individuals is subject to the reasonableness test under the Unfair Contract Terms Act (1977)
FALSE
The UTCA does not apply to contracts between private individuals.
A company attempting to recover damages in respect of a potential lost contract of which the other party was not aware and might anyway not have been won …
will not succeed as such damages are to remote from the breach.
Specific performance will probably not be awarded in a contract for the performance of personal services due to the requirement for …
supervision and quality assurance.
Specific performance will probably not be awarded in a contract for the performance of building a house due to the requirement for …
supervision and quality assurance
T/F: Alternative dispute resolution may not be used once court proceedings have been instigated.
FALSE
Alternative dispute resoution is actively encouraged even if court proceedings have begun.
T/F: If a wedding venue is destroyed by fire a contract for its hire will be rendered frustrated.
TRUE
see Taylor v Caldwell
T/F: If the peformance of a contract becomes significantly more onerous or expensive than originally contemplated, it will be treated as frustrated.
FALSE
If performance of a contract becomes illegal, due to for example a restriction on the sale of fireworks or firearms …
then it will be treated as frustrated.
If performance of a contract becomes onerous, due to for example an increase ini the price of a raw material or deteriorating international relations …
then the contract will NOT be treated as frustrated.
Terms within contracts between two businesses are generally governed by the …
Unfair Contract Terms Act (1977)
Terms within contracts between … are generally governed by the Unfair Contract Terms Act (1977).
two businesses
Terms within contracts between two individuals are generally governed by …
no specific legislation.
Terms within contracts between … are generally governed by no specific legislation.
two individuals
Terms within contracts between businesses and consumers are generally governed by …
The Consumer Rights Act (2015)
Terms within contracts between … are generally governed by The Consumer Rights Act (2015).
businesses and consumers
T/F: An exclusion clause in a business to business contract may be deemed void or be subject to a test of reasonableness.
TRUE
under the Unfair Contract Terms Act (1977)
T/F: Under contract law, provided substantial performance has been rendered, the other party may not seek redress.
FALSE
only ‘complete and exact’ performance discharges a contract
T/F: Breach of contract occurs in all cases where one party to a contract fails to perform their contractual obligations.
FALSE
a contract may be frustrated, for example.
