CHAP 2 CONTRACT LAW Flashcards
Form of contract
Can be in any form - simple
Maybe written, oral, from conduct of parties.
Exceptions of form of contract
BOE, Cheques, transfer of share, cotract of sale of land must be in writing
What is not an offer
An invitation to treat is not an offer
E.g an advertisement is an invitation to treat not an offer
However it would be an offer if no further negotiations were intended or expected. And advertisers made it clear that they would pay money to anyone complying with the terms of the adv.
Window display: not an offer of sale, but an invitation to treat.
Goods on shop shelves
Tender: asking parties to submit terms in which they are willing to carry out work or supply foods. It is an ITT because offeror and other party is free to acceot or reject
A mere statement of sp in response to a request for information is not an offer
Auction: adv of auction is not an offer. auctioneer asks for bids is an invitation to treat.
Cross offer: two parties makes identical
Offer to each other without knowing that the other has made an offer. No binding contract
Tender exception
If invitation contains that purchaser will require certain quantity of goods then acceptance of tender will form a contract
If purchaser only may require goods, acceptance gives rise to standing offer. In this situation, no compulsion on purchaser to take any goods.
Termination of an offer
Terminated by revocation
Rejection
Lapse
Revocation
By offeror can be made at any time before acceptance, even if the offeror has agreed to keep offer open.
Must be communicated to the offeree
Can be communicated by the offeror or reliable 3rd party
Rejection
By the offeree may he outright or by means of a counter offer
Not mere request for further details does not constitute a counter offer
Lapse
On
Death of offeror unless offeree accepts in ignorance of the death
Death of offeree
Failure of a condition. If made on condition
After a expiry of a fixed time (if any) or after reasonable time
Acceptance
Unqualified and unconditional assent to all the terms of the offer
Can oral, written or by conduct
The offeror can stipulate a particular mode of acceptance
Communication of acceptance
Not effective until it’s communicated to the offeror
In a fax, telex or telephone, message is received during normal b.hrs that is when communicated even read later
If received outside business hrs then deemed to be communicated when the business next opens
Offeror can expressly or impliedly kahe k mujhe communication ki zaroorat nh
But silence cant be acceptance
Postal rule
Acceptance is completed as soon as the letter is posted
Howver it only applies if:
Letter properly stamped, addressed and posted
Post is reasonable method of communication
Exception to postal rule
This doesnot apply if offeror clearly states that he must receive the acceptance
Consideration
Every contract must contain consideration but speciality contract do not require consideration unless the terms of the agreement require it
Types of consideration
Executory consideration (abhu nahi dena)
Given where there is an exchange of promises to do something in future
Eg goods on COD
Executed: abhi goods ke against cash diya
Shopping ki aur paise diye at a time
Adequate consideration
There is no need for each party’s consideration to be equal in value
Sufficient consideration
Must have some monetary value
Capable in law of amounting consideration
Past consideration
Is insufficient and therefore not valid
Whollu performed before the other party gives his primos
Ghar decor krdiya baad me paise diye aur kaha yeh lo
Part payment
Pinnels case state that payment of smaller sum does not discharge liability of the greater amount however some exceptions are there
Exceptions to part payment
4 exceptions
1. Part payment made by 3rd party
2. compostion with creditors (creditors agree to accept some sum )
3. accord - both parties agree freely to part payment
4. satisfaction - payment at earlier date, at diff place, diff currency
Promissory estoppel
Fairness and justice. Prevents a person to going back his promise to accept a lesser amount.
e.g. during war years. If war years ended then during war year rent cannot be recovered. iske baad full le sakte ho pr in between ka nahi le sakte
Doctrine of promissory estoppel principles:
-Must be existing contract between parties
- claimant must voluntarily waive his rights
- intention that defended shud rely on claimant
- defedent must alter their legal position because of the waiver
Demerits of doctrine of estoppel
- It is a shield not a sword
- Only have suspensory effect
- Party seeking to use it as a defence must have acted fairly previously in his dealings
Privity of contract
acquire rights and obligations under it
can sue and be sued on it
Exception to privity of contract
Third party bhi enforce krskti hai if contract uske benefit k lye kiya gaya ho even he is not a party to the contract and he expressly identified by his name or description
do parties ne apas me contract kiya aur second ne third se contract kiya (constrcution) so in this case collateral contract wali part bh privity hai
restrictive covenant
Rleated to land runs even if it sold to another party. he or she has to comply with the restrictions
Insurance law
Allows third party to take the benefit of the contract. Life insurance pays to the third party even after the death of policy holder
trust law
Allows beneficiary to enforce a trust
Agency law
Allows the agent to make a contract between his principal and third party even though thirty party might be unaware that he (A) is acting as an agent
Intention to create legal relationship
normally legal realtion hoga. pr nahi hua toh agreement k hisaab se hoga
Domestic and social agreement
Not legally bound contracts
Agar proper agreement hai even domestic context toh its an intention to create a legal relation
okay
Binding in honor only
tere mere beech ki baat hai to legally bound nahi
letter of comfort
international contracts
assure contracting party that parent comp will provide its subsidairy all of the resoruces to execute the contract however parent company cant be sued. no legal effect
Terms of the contract
Statement written or oral made during the the negotiations leading to a contract, may be term of the contract
Representation
something said by the offeror in order to induce the offeree to enter into the contract. may or may not be the term of the contrac
if rep becomes term
Innocent party has remedies for breach of term as well as for misrepresentation
If rep does not become term
innocent party will have remedies only for misrepresentation which are based on equitable remedies
Terms
may be express or implied
express are included in the contract by one or both parties
Types of terms
- COnditions
- Warranties
- Innominate terms
Determines the type of remedies awarded
Conditions
Damages, dicharge or both
Warranties
incidental to the main purpose of the contract
damages only
innominate terms
neither con nor warran
if trivial - damages only
treated as if warranty
if serious - damages, discharge or both . treat as if it were condition
Without reserve auction
K reserve nahi hoti koi price
Har soorat sale hoga so yeh offer hojati hai
Invitation to tender
Invitation (purchaser asks) suppliers 5 k mujhe tender do 5 shelves pe saman rkhne hain
Tender
Given by offerors (jo goods denge)
Action for price (CL)
Action for price (simple action instead of paying price)
Limits: property passed on from seller to buyer
Sum due after anticipatory breach may not be recovered unless they affirm the contract
