2 Contract Law

Question 1

Simple Contract?

Answer 1

Doesn’t need be in writing

Question 2

Subject to Contract mean?

Answer 2

Parties to an agreement not legally bound until Contract has been executed. Either party can withdraw

Question 3

What is an Offer?

Answer 3

A definite promise bound on specific terms made by offerer to offeree. Offeree can be person, class of persons, or whole world.

Question 4

What is an invitation to treat?

Answer 4

An invitation to someone else to make an offer to you

Question 5

Statement made early in negotiations an offer?

Answer 5

Probably not

Question 6

Is a statement of intention to sell an offer?

Answer 6

No

Question 7

Vague statement an offer?

Answer 7

No

Question 8

Can a terminated offer be accepted?

Answer 8

No

Question 9

When Does rejection occur?

Answer 9

Offeree turns down original offer. Can be express or by way of counter offer.

Question 10

Is request for more info rejection of offer?

Answer 10

No

Question 11

When does revocation occur?

Answer 11

Offerer withdraws offer

Question 12

Conditional offer?

Answer 12

Dependent on change in circumstances or specified event

Question 13

When will an offer cease to exist?

Answer 13

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

Question 14

Can a revocation be communicated by a 3rd party?

Answer 14

Yes

Question 15

What is Acceptance?

Answer 15

Unqualified and unconditional assent to all terms of offer. Can be oral, in writing, or by conduct

Question 16

Must acceptance always be communicated to offeror?

Answer 16

Yes

Question 17

Fax received during business hours is considered communicated when?

Answer 17

Received

Question 18

Fax received outside business hours is communicated when?

Answer 18

Business opens

Question 19

Executory Consideration

Answer 19

The party agrees to do something in the future at the time of the agreement. A promise given in exchange for a promise.

Question 20

Executed consideration

Answer 20

Consideration provided at time of the agreement. A performed act in exchange for a promise.

Question 21

Must consideration be sufficient?

Answer 21

Yes. But it need not be adequate.

Question 22

Does consideration need to be money?

Answer 22

No, but it must be of monetary value to be sufficient.

Question 23

When (time) does actual breach of contract occur?

Answer 23

At time performance of contract was due

Question 24

When does anticipatory breach of contract occur?

Answer 24

Before due date for performance, one party shows by actions will not be performing the contract

Question 25

What are damages?

Answer 25

Common Law remedy. Main remedy for breach of contract. Aim to put parties in position they would have been had the contract been performed.

Question 26

Unliquidated damages

Answer 26

Damages for which there is no provision in the contract. Court determines damages payable.

Question 27

Remoteness

Answer 27

Damages are only rewarded for losses which are not too remote

Question 28

Measure of damages

Answer 28

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.

Question 29

Damages for loss of bargain

Answer 29

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

Question 30

Liquidated damages and penalty clause

Answer 30

If contract provides for payment of fixed sum on breach, its either a penalty clause or liquidated damages

Question 31

Liquidated damages

Answer 31

Pre-estimate of expected cost, enforceable by court

Question 32

Penalty Clause

Answer 32

Arbitrary sum. Not enforceable by court. Instead court will value claimant’s losses.

Question 33

Equitable remedy

Answer 33

Court can decide whether or not to award an equitable remedy