Chapter 1 - The Concept Flashcards
What is the definition of a contract?
An agreement that gives rise to obligations and which is enforceable and recognised by the law
What was observed by the Judge about the creation of contracts in the case of MacInnes v Gross [2017]?
That “a contract can be made anywhere, in any circumstances”, e.g. in person, on the phone, online etc
What are the five essentials for a valid contract?
Offer, acceptance, agreement, consideration and intention to create a legal relationship
What would happen without one of the five essential elements of contract?
The contract would not be enforceable in court as it would not have legal effect
Give four examples of when a contract will not be formed
There is no offer on certain terms / an offer has not been unconditionally accepted / both parties have not given consideration / both parties do not intend the agreement to be legally binding
Every agreement is a contract. True or False?
False. People may exchange promises without the intention of legal consequences, or they did not contribute something of value to the bargain
What is the rule of privity of contract?
It states that only the parties to a contract are bound by its terms and therefore, only those parties are able to enforce the contract in the Court.
What is the main case law relating to privity of contract?
Tweddle v Atkinson [1861] (fathers agreeing to pay engaged couple, son could not enforce)
Describe the case of Dunlop Pneumatic Tyre Co Ltd v Selfridge and Co Ltd [1915] as an example of how a contract cannot place a burden on a third party.
Dunlop had a contract with and sold tyres to a wholesaler, in which their tyres could not be resold under a certain price. The wholesaler sold the tyres to Selfridges, who then sold them below the price as Selfridges were not part of the original contract between Dunlop and the wholesaler. The Court held that a stranger to a contract (Selfridge) cannot sue or be sued under it.
Explain how s11 Married Woman’s Property Act 1882 is an exception to the rule of privity of contract.
This section states that if someone insures their life for the benefit of a spouse, civil partner or child then that beneficiary can sue on the policy, as a trust was created in their favour when the policy is created.
How did the case of Jackson v Horizon Holidays Ltd [1975] extend the exceptions to the privity of contract rule?
Mr Jackson was able to recover damages for his entire family after suffering a disastrous holiday, even though only Mr Jackson himself was privy to the contract.
In what two instances may a third party enforce a term of the contract (under s1 C(RTP)A 1999)?
If the contract expressly says they can enforce it (s1(1)(a)) or if the term they are enforcing purports to confer a benefit on them (s1(1)(b)).
When can a third party NOT enforce a term of the contract (under s1 C(RPT)A 1999)?
If it appears that the parties did not intend them to enforce it (s1(2)) or if the third party has not been “expressly identified by name, as a member of class or as answering a particular description but need not be in existence when the contract was entered into” (s1(3)
What did the Judge state in the case of Avraamides v Colwill [2006] with regards to s1(3) C(RPT)A 1999?
The contract was not precise enough in who was included as a third party as they fell into a large number of unidentified classes. This stressed the importance of ‘expressly’ stating third parties.
What did the Judge state in the case of Chudley v Clydesdale Bank plc [2017] in relation to s1(3) C(RTP)A 1999 and how is it distinguished from Avraamides?
In this case, the House of Lords confirmed that the interpretation of the express contractual terms could be done to expressly identify the third parties. This conflict to Avraamides can be distinguished as this case did not involve as broad a term as Avraamides.
