basics of contract law

Question 1

why is contract law neccecary?

Answer 1

to ensure the honour of peoples promises an agreemtns givng a level of certainty needed when running businesses that have capital at risk
allows for society to work

Question 2

what is the definition of a contract

Answer 2

an agreement giving rise to obligations which are enforced and recognised by law

Question 3

what case is there behind the bounding effects of a contract

Answer 3

court case l’estrange v graucob sets the judicial precedent that nce you have signed a contract you are bound to it.

in the case l’estrange brought a cigarette machine for her pub which was broken, she signed the contract before knowing this and therefore had to still pay

Question 4

is there a specific from that a contract must take?

Answer 4

• no specific form canbe verbally, written or based on conduct

except for:
- sale and transfer of land
- customer credit agreemeents
- bills of exchange
that MUST be in writing

Question 5

what makes a contract legally binding?

Answer 5

• agreement
• intention to be legall binding
• consideration
• certainty of terms

Question 6

what is an offer?

Answer 6

a proposal of terms with the intention of being legally binding upon he acceptance of whom the offer was proposed to

Question 7

what is an invitation to treat?

Answer 7

an invitation to treat is an offer made to someone for them to negotiatve. replying to one can only be an offer or antoher invitation to treat.
you cannot accept an invitation to treat

Question 8

what legal background is there of invitations to treat

Answer 8

Pharmeseutical society v boots set the judicial preedent that self service items in a shop arent an offer but an invitation to treat. which another offer is given when payign for an item at the till

Question 9

are newspaper adverts invistations to treat or offers?

Answer 9

the case partirdge adn crittenden established that newspaper adverts are only inistations to treat rather than legal offers

Question 10

how long does an offer last

Answer 10

• some contracts have time periods written into them
• depending onthe subject matter as to when an ffer lapses (ex perisahble foods will have a very short offer timer
• if the offeror dies so does the contract
• unti someone accepts or makes a counter offer
• if the offeror revokes their offer

Question 11

is silence a valid acceptance to an offer

Answer 11

NO
the court case felhouse v bindey set the precedent that silence is not a vlaid acceptance to an offer it has to be verbal, written or through conduct

Question 12

what is the postal rule?

Answer 12

estanblished by the judical precedent set in the adams v lindsell case. if an offer is sent by a lterr as soon as the acceptance letter is sent the contract has been signed. not when it arrives in the persons letterbox

Question 13

what rules are there when accepting through email

Answer 13

judical precedent set in entores. miles far east crp sets the precedent that email acceptnace is valid and the contract is binding when the email lands in the account of the offeror not when the oferee sends the acceptance

Question 14

what is a unilateral agreement

Answer 14

a promise in return for an ect.
unlike bilateral, these agreements arent made between two people and are instead offered to a wide range of the public for anyone to accept

Question 15

carlil v carbolic smoke company

Answer 15

• cbolic smoke company set out advertisements saying their product if used correctly would prevent the flu. and that if anyone used it and got the flu they would pay out £100
• carlil did this and still got the fu to went to get her money
• the company argues that the offer was aninvitation to treat, sales talk and wasnt an actual offer
• however the ocurts ruled that it was an offer and the atc of carlil buying the product and getting ill was her accpetance making the contract a unilateral binding contract

Question 16

what is meant by the intention to be legallly bound

Answer 16

the idea that both parteis know and accept that breaching of their agreement can lead to legal action

Question 17

what presumptions does that law make about intention to be legally binding agreements

Answer 17

• persumes that all business and commerical agreements have the intention to be legally binding but family agreements dont

Question 18

hadley v kemp

Answer 18

• school mates started a band and shared the profits they made equall between themsleves
• they blew up and started to make a lot of money
• when the band broke up lead singer kemp kept all the profits to himslef as he was the main songwrite.
• took him to court wehre the judge ruled that kemp wasnt breaking a contrat as the agreement made when they were at schoool never intended to be legally binding

Question 19

how can friends and family make legally binding contracts

Answer 19

family and friends making business agggreemetns together must rebut the presumption non intention
they also must clearly state that ‘this intends to be leaglly binding’ usually with a whitness or even better endorsed by a soliciter when money is a stake

Question 20

what is the measure of damages in a contract?

Answer 20

• compensatory
  damages owed when a contract is breeched is measured by calcusating how much in financial terms the injured party would have gained if the contract was fufilled
• ex if a landlord stops being paid rent and the lease had 4 months left the landlord would be owned b the tenants 4 months rent

Question 21

what is a consideration

Answer 21

something that has value in the eyes of the law
usually a promise made
there has to be consdierations for a contract to be legally binding

Question 22

examples of what a consideration could be

Answer 22

• promise to do something (ex pay money)
• ## promise to refrain form doing something (ie. work with another employer)

Question 23

what do considerations have to be

Answer 23

considerations have to be present, they cannot be past actions written into a present contract

Question 24

McArdle case for consdieraton

Answer 24

• kids were left their parents house in thier wills.
• one sibling lived there with his other half. she did work to the house and the other sibiligns promised her a cut of when they sell it for
• when they went to sell it they didnt give her a cut she went to sue
• but becuase the action was past it. didnt count as binding it wasnt valid

Question 25

what does the value of a consideration have to be

Answer 25

consdieraitons have to be things of value but they don’t need to be adequate
for example
bath and somerset concil own the campus in which the uni pays the council in 1 peppercorn a year
this is becuase if you dont put a value on it it isnt a contract its a gift with no terms and conditions.
as the council want to uni to keep the site in good condition ect the consdieration needs value for it tobe a valid contract

Question 26

what is the importance of certainty of terms

Answer 26

• if terms of a contract are unclear it is hard for courts to uphld the terms of the contract

Question 27

example case of uncertrain terms

Answer 27

loftus v roberts
- loftus wanted to be a performed an desperatley want to be in one of robert’s productions
- he agreed and hold her he would pay her ‘the going rate’
- she did the shows and at the end he dint pay her
- he wasnt sued becuase it wasnt certain what going rate he meant
- the terms were unclear so she wasnt protected in cout

Question 28

what consitutes to a valif contract

Answer 28

offer and acceptance
intention to be legally binding
certainty of terms
considerations

Question 29

what consitutes to a void contract

Answer 29

one that has no intention to be legally binding:
- either has had a actionable misrepresentation
- a invalid considertion
- no intention to be legally bound

Question 30

what constitutes to a voidable contract

Answer 30

• when a main term sof a contact is breeched the contract is made void.the injured party can walk away from thier contractual obligations and claim for damages