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Dispute Resolution > 2: Contract and Tort > Flashcards

2: Contract and Tort Flashcards

1
Q

What are the three essentials of contract formation?

A

Agreement
Consideration
Intention to create legal relations

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2
Q

What are the elements of agreement?

A

Offer and acceptance.

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3
Q

Through which means may an offer be made?

A

Orally
In writing
By conduct

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4
Q

What is a unilateral contract?

A

A promise in return for an act.

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5
Q

What is a bilateral contract?

A

A promise for a promise.

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6
Q

What is an invitation to treat?

A

An invitation to others to make an offer or to open negotiations.

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7
Q

Which 5 situations usually involve some sort of invitation to treat?

A

Advertisements
Auctions
Requests for tenders
Display of goods for sale
Mere statements of price

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8
Q

How can you terminate an offer?

A
  • Refusal (revocation) or Acceptance
  • Counter-offer (offering new terms)
  • Lapse of time (offer took too long to accept)
  • Death (no-one is able to accept on their behalf)
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9
Q

What does revocation of an offer mean?

A

The offeror withdraws their offer.

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10
Q

When is an acceptance valid?

A

As soon as it is communicated, e.g. via post, in person, via email when sent.

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11
Q

When is a revocation valid?

A

When it is received.

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12
Q

What happens if someone else tells an offeree that the offeror has withdrawn the offer?

A

Fine, as long as it is a reliable third party, the revocation will still be valid.

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13
Q

Is a quote an an invitation to treat or an offer?

A

An offer.

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14
Q

What’s the difference between a counter offer and a request for further information?

A

A counter offer is ‘I accept your offer and I will pay you in full over three months.’

A request for information is ‘I accept your offer. Will you accept payment info over three months?’

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15
Q

What is a counter offer?

A

When the offeree tries to assert new terms on the offer.

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16
Q

How long after an offer is made will it run out?

A

Unless there is a stated time limit, it will end after a ‘reasonable time’. (Courts will decide what that ‘reasonable time’ is)

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17
Q

What is a conditional acceptance?

A

When acceptance is ‘subject to contract’ or ‘sale agreed’ in houses, meaning the person accepts but only on the condition that a formal binding contract can be agreed upon later.

Does not bind either party.

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18
Q

In general, what is the rule regarding communication of acceptance?

A

Acceptance must be communicated to the other party, e.g. phone going dead and offeror not hearing ‘I accept’ means no contract.

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19
Q

What are the exceptions to the general rule on communication of acceptance?

A
  • Acceptance by conduct
  • Acceptance by unilateral offers
  • Acceptance by post
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20
Q

Explain the exception to the general rule on communication of acceptance: acceptance by post?

A

Acceptance via post is considered to be valid as soon as the letter is posted, even if delayed or never reaches the other party.

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21
Q

What is the ‘postal rule’?

A

When acceptance is posted, it is generally seen as being valid from the point of the letter being posted.

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22
Q

When does the ‘postal rule’ apply?

A
  1. When the letter is correctly stamped and adressed.
  2. Unless parties exclude the rule, either by express provision or by implication (e.g. notice is required to sell a house)
  3. Only when it is reasonable to use the post (e.g. if the offer was made via telegram and acceptance was made via post, it was not an equally expedient mode of acceptance).
  4. Only if it would not ‘lead to manifest inconvenience and absurdity’.
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23
Q

What is the rule of acceptance for emails?

A

Ordinarily, an acceptance sent to a commercial business during normal office hours will be valid as soon as it is received into the email inbox, as the company has a responsibility to arrange the prompt handling of messages.

If an email arrives out of hours, it will be valid once normal office hours resume and when someone is available to receive it.

However there is no binding authority in place to govern this situation.

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24
Q

What are the rules on consideration?

A

Must move from the promisee
Must not be past
Need not be adequate
Must be sufficient

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25
Q

When are agreements presumed to be legally binding?

A

When made in the course of business. Not in family siutations.

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26
Q

What are mere puffs?

A

Statements with no legal effect.

27
Q

How do you distinguish a representation and a term?

A
  1. importance that the parties to the statement
  2. if the statement was reduced into writing
  3. the timing of the statement
  4. whether any parties had specialist knowledge or skills
28
Q

How can implied terms be incorporated into a contract?

A

Via statute, custom or the courts.

29
Q

What is the difference between conditions and warranties?

A

Conditions: the breach of which entitles the injured party to treat the contract as ended and/or claim damages.

Warranties: the breach of which entitles the injured party to damages only.

30
Q

What is an innominate or intermediate term?

A

When you can’t find out whether it is a condition or a warranty until it is after it has been breached. The court will decide whether the breach of the term goes to the root of the contract.

31
Q

What is the difference between a void and a voidable contract?

A

A void contract is one that never existed, so no rights or duties can be passed on under a void contract.

A voidable contract is one which does exist and will continue to exist unless one of the parties decides to bring it to an end.

32
Q

What is a misrepresentation?

A

A false statement of fact or law, which is induces the other party to enter into a contract by their reliance on the statement.

33
Q

Does a misrepresentation cause a contract to be void or voidable?

A

A misrepresentation causes a contract to become voidable.

34
Q

What are the three types of misrepresentation?

A

Fraudulent
Negligent
Innocent

35
Q

What is a fraudulent misrepresentation?

A

A false statement of fact or law intended to induce (and actually inducing) the other party to make a contract. It renders the contract voidable

36
Q

What are the remedies for fraudulent and negligent misrepresentation?

A

Damages are available on a tortious basis (monetary compensation) and/or rescission, setting the contract aside.

37
Q

What is a negligent misrepresentation?

A

A false statement made by someone with no reasonable grounds for believing it to be true.

38
Q

What is a innocent misrepresentation?

A

A false statement which is neither fraudulent nor negligent.

39
Q

What are the remedies for innocent misrepresentation?

A

Rescission is the main remedy.

Damages can be awarded on a contractual basis and only as an alternative at the discretion of the court.

40
Q

When is the right to rescind lost?

A

When:
- the contract is affirmed
- a reasonable time has elapsed
- the parties cannot be restored to their original positions
- an innocent third party has acquired a right to the subject matter of the contract.

41
Q

How can a contract be discharged?

A

Performance
Breach
Agreement
Frustration (making the contract impossible)

42
Q

What is the aim of damages?

A

To place the injured party in the position they would have been in had the contract been performed.

43
Q

When can damages be awarded?

A

When:

the breach of contract caused the loss

the loss is not too remote

the loss could not reasonably have been avoided (mitigation)

44
Q

What is specific performance?

A

A court order telling the party in breach to fulfil their obligations. It is a discretionary remedy and will not be given if, for example, damages would be adequate.

45
Q

What is an injunction?

A

A court order telling the party to a contract not to do something. It is a discretionary remedy and will generally not be granted if its effect will be to force someone to perform a contract for personal services.

46
Q

What needs to be proven for a negligence claim to be successful?

A

Duty of care
Breach of duty
Causation of damage

47
Q
A
48
Q

Give 5 examples of where an established duty of care exists?

A
  1. Road users, owe other road users
  2. Doctors, owe their patients
  3. Employers, owe their employees
  4. Parents, owe their children
  5. Lawyers, owe their client
49
Q

What is the modern approach to determining whether a duty of care is owed in a novel situation?

A

There is no single definitive test that should be used to assess whether or not a duty of care arises in a particular case.

The starting point will be existing precedent.

Courts can then look at the Caparo formulation as potentially indicating whether there should be a duty of case. The main change is that if one of the answers to a question is ‘no’, the courts are not bound to conclude that a duty of care doesn’t exist, or vice versa.

50
Q

What are the three questions of the Caparo test?

A

1 - Foreseeability: Was the risk of the injury or harm to the claimant reasonably foreseeable?
2 - Proximity: Was there sufficient proximity between the parties?
3 - Is it fair, just and reasonable, on public policy grounds, to impose a duty of care?

All answers to these questions must be ‘yes’ in order for the duty of care to be valid.

51
Q

What are the factors that will be taken into account when finding out the standard of care?

A
  1. the reasonable person’s attributes
  2. reasonable foreseeability of harm (incl magnitude of risk)
  3. vulnerability of claimant
  4. defendant’s objective
  5. cost of avoiding harm
52
Q

What is res ipsa loquitur and what then applies?

A

When the act itself is enough to prove negligence and the burden of proof is then on the defendant to prove that they are not guilty.

53
Q

What are the two types of causation that need to be proven?

A

Factual causation (in fact) - who actually caused the harm?
Legal causation (in law) - what damage should be recoverable from the defendant?

54
Q

What is a novus actus interveniens?

A

A novus actus interveniens is a break in the chain of causation, meaning the original tortfeasor will not be liable for events that happen after the break. It literally means ‘a new intervening act’.

55
Q

What are the two types of novus actus interveniens?

A

There are two types: intervening third-party acts and intervening acts of the claimant.

56
Q

What happens if a claimant is found to be negligent?

A

If claimant is found negligent, there could be contributory negligence.

57
Q

What are the two elements of legal causation?

A

Foreseeability of damage

The ‘thin skull’ rule

58
Q

Explain the ‘thin skull’ rule?

A

The ‘thin skull’ rule, the defendant must take his victim as he finds him.

Also known as ‘egg-shell skull’ or ‘vulnerable claimant’.

59
Q

What is vicarious liability?

A

Vicarious liability imposes liability on one party for the wrongful acts of another.

60
Q

What are the 3 complete defences in tort?

A

Ex Turpi: illegal activity

Volenti: Claimant knew of risks and freely consented to them

Limitation: Claim not commenced within set period of the damage occurring

61
Q

What is a partial defence in tort?

A

Contributory negligence, where claimant failed to take reasonable care for their own safety and this failure contributed to the damage suffered.

62
Q

When is an exclusion clause a defence?

A

When the claimant has sufficient notice of the term and if it conforms to statute - it depends on the term if it is a complete or partial defence.

63
Q

Who is the burden of proof on in terms of a negligence claim and then a defence?

A

The claimant must prove on the balance of probabilities for the claim and the defendant must prove on the balance of probabilities that a defence applies.

64
Q

What are special and general damages?

A

Special damages are quantifiable financial losses because of the tort and before the date of the trial.

General damages are not capable of precise calculation, including loss of earnings, pain and suffering and loss of amenity.

Dispute Resolution (20 decks)

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