2 Contract Law Flashcards
Simple Contract?
Doesn’t need be in writing
Subject to Contract mean?
Parties to an agreement not legally bound until Contract has been executed. Either party can withdraw
What is an Offer?
A definite promise bound on specific terms made by offerer to offeree. Offeree can be person, class of persons, or whole world.
What is an invitation to treat?
An invitation to someone else to make an offer to you
Statement made early in negotiations an offer?
Probably not
Is a statement of intention to sell an offer?
No
Vague statement an offer?
No
Can a terminated offer be accepted?
No
When Does rejection occur?
Offeree turns down original offer. Can be express or by way of counter offer.
Is request for more info rejection of offer?
No
When does revocation occur?
Offerer withdraws offer
Conditional offer?
Dependent on change in circumstances or specified event
When will an offer cease to exist?
1) Not accepted in specified time
2) After a reasonable time if no time specified
3) Death of offeree/offeror unless offeree accepts in ignorance of the death
Can a revocation be communicated by a 3rd party?
Yes
What is Acceptance?
Unqualified and unconditional assent to all terms of offer. Can be oral, in writing, or by conduct
Must acceptance always be communicated to offeror?
Yes
Fax received during business hours is considered communicated when?
Received
Fax received outside business hours is communicated when?
Business opens
Executory Consideration
The party agrees to do something in the future at the time of the agreement. A promise given in exchange for a promise.
Executed consideration
Consideration provided at time of the agreement. A performed act in exchange for a promise.
Must consideration be sufficient?
Yes. But it need not be adequate.
Does consideration need to be money?
No, but it must be of monetary value to be sufficient.
When (time) does actual breach of contract occur?
At time performance of contract was due
When does anticipatory breach of contract occur?
Before due date for performance, one party shows by actions will not be performing the contract
What are damages?
Common Law remedy. Main remedy for breach of contract. Aim to put parties in position they would have been had the contract been performed.
Unliquidated damages
Damages for which there is no provision in the contract. Court determines damages payable.
Remoteness
Damages are only rewarded for losses which are not too remote
Measure of damages
Courts value damages as cost to put claimant in position would have been had contract performed. This is protecting the expectation interest of the claimant.
Damages for loss of bargain
If buyer bought goods for £50 and not delivered then bought goods from someone else for £60, damages would be £10.
If claimant suffered no loss, would be awarded only nominal damages
Liquidated damages and penalty clause
If contract provides for payment of fixed sum on breach, its either a penalty clause or liquidated damages
Liquidated damages
Pre-estimate of expected cost, enforceable by court
Penalty Clause
Arbitrary sum. Not enforceable by court. Instead court will value claimant’s losses.
Equitable remedy
Court can decide whether or not to award an equitable remedy
