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F4 Corporate and Business Law > 2 Contract Law > Flashcards

2 Contract Law Flashcards

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1
Q

What are the following elements needed a valid contract?

A

Agreement, consideration, intention to create legal relations, capacity and legality

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2
Q

What is meant by capacity in a valid contract?

A

Each party must have the legal power to bind itself contractually

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3
Q

What is a contract known as if it does not need to be in writing?

A

A simple contract

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4
Q

What type of contracts which requires to be in writing to be valid and enforceable?

A

Bills of exchange, regulated consumer credit arrangements, transfers of land and guarantees

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5
Q

What is the limitation period for contacts by deed?

A

12 years

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6
Q

What is the limitation period for all other contacts?

A

6 years

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7
Q

What do the terms subject to contract mean?

A

Means the parties to an agreement are not legally bound until a contract has been executed

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8
Q

What is an offer?

A

An offer is a definitive promise to be bound on specific terms made by the offeror to the offeree

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9
Q

How can an offer be made?

A

Any form but must be communicated to the offeree

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10
Q

What is an invitation to treat?

A

An invitation to treat is an invitation to someone else to make an offer to you

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11
Q

How can an offer be terminated?

A

Rejection and counter offer, revocation, lapse of time and failure of a pre condition

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12
Q

When does rejection occur?

A

When an offeree turns down the original offer or makes a counter offer

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13
Q

When does revocation occur?

A

any time before acceptance, can be made even if the offerer has agreed to keep the offer open and must be communicated (personably or reliable third party)

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14
Q

What are the exceptions to the rules for revocation?

A

If a deposit is paid or in a unilateral contract

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15
Q

What is a unilateral contract?

A

One which is made to the whole world and as such it would be virtually impossible to notify everyone who saw the offer of the revocation

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16
Q

If someone dies during an offer how is this treated?

A

Lapse of death unless the offeree accepts in ignorance of the death

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17
Q

What is a conditional offer?

A

One which is dependant on a specified event or change in circumstances

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18
Q

What is acceptance?

A

Unqualified and unconditional assent to all the terms of the offer

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19
Q

How can acceptance be express?

A

Implied by the conduct of the offeree

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20
Q

What is the postal rule?

A

States that acceptance is complete as soon as the letter is posted

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21
Q

When does the postal rule apply?

A

If it is probably stamped and addressed and if it would not be unreasonable to use the post

22
Q

When does the postal rule apply?

A

Even if the letter is never received, but not if the offeror states he must receive acceptance

23
Q

What must simple contacts be supported by?

A

Consideration

24
Q

What do contacts made by deed do not require?

A

Consideration unless the terms of the agreement require it

25
Q

What is consideration?

A

Consideration is an act or forbearance (promise of it) on the part of one party to a contract as the price of the promise made by the offer

26
Q

What is valid consideration?

A

Both executed and executory consideration is can able of being valid consideration

27
Q

What is executed consideration?

A

Executed consideration is consideration provided at the time of the agreement. It is a pro-formed act in exchange for a promise

28
Q

What is executory consideration?

A

Executory consideration is provided when the party agrees to do something in the future at the time of the agreement. It is a promise given in exchange for a promise.

29
Q

What must consideration be?

A

Must be sufficient but does not need to be adequate

30
Q

What is invalid consideration?

A

Past if it involves something which has already been done at the time the promise is made

31
Q

What’s the issue with part payment?

A

Payment of a lesser sum in satisfaction of a great sum cannot be satisfaction for the whole sum

32
Q

What are the exceptions to the part payment rule?

A

Alternative consideration, payment by third party, doctrine of promissory estoppel and Barton between creditors

33
Q

What is promissory estoppel?

A

The doctrine of promissory was stopped is based on the principles of fairness and justice (prevents a person going back on promise for lower amount)

34
Q

What does provity of contract mean?

A

Only a person who is a party to a contract has enforceable rights or obligations

35
Q

What does the contracts act 1999 allow a person to do?

A

Someone is not a party to a contract to enforce it as long as the contract was for his benefit and he was expressed by name

36
Q

What does trust law allow?

A

A beneficiary to enforce a trust

37
Q

What is a representation?

A

Something said by the offerer to induce the offeree to enter into the contract. Turns into a term when written into contract

38
Q

What are express terms?

A

Elements of a contract which have been specifically agreed. Can be written, oral or both

39
Q

What are implied terms?

A

Terms which are not expressly included but are still part of the contract

40
Q

What are terms implied due to the term of the contract?

A

Courts will imply certain types of contract because they are felt to be an implicit requirement of that type of contract

41
Q

What are terms implied by the courts in order to give business efficacy?

A

Failure to cover a matter which when addressed would make the agreement unworkable, the courts imply w term to carry out the parties presumed intentions

42
Q

What is terms to comply with custom and usage?

A

The courts will imply terms into contracts if they are felt to be usual in that type of agreement, but only if it will not create an inconsistency with the express terms

43
Q

What are terms implied by acts of parliament?

A

Legislation can imply terms into particular contracts if parliament has felt it is important to give statutory protection

44
Q

What are the three types of terms?

A

Conditions, warranties, innominate terms

45
Q

What is a condition?

A

Important term going to the root of the contract

46
Q

What happens if you breach a condition?

A

Can result in damages or discharge or both.

47
Q

What does discharge entitle?

A

The innocent parties to repudiate the contract and claim damages

48
Q

What is a warranty?

A

Less important term than a contract, which is incidental to the main purpose of the contract

49
Q

What happens if you breach a warranty?

A

Results in damages only

50
Q

What is an innominate term?

A

Neither a condition or a warranty

51
Q

If a breach of a innominate term is trivial, what is the effect?

A

Damages only, treat as if a warranty

52
Q

If a breach of a innominate term is serious, what is the effect?

A

Damages, discharge or both. Term is treated as a condition

F4 Corporate and Business Law (12 decks)

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