Chapter 10 Law of Contract Flashcards
What is a contract?
An agreement between two or more persons, creates and obligation to do or not to do a particular things.
Promise(s) made by one person to another, which the court will enforce. Promises is crucial in a contract even if it is not signed, written, 形式不重要，但是必须要有binding promises.
What do you call someone who can enforce a promise? And someone who makes the promise?
enforce = promisee
make promise = promissor
*Both buyer and vendor can be promissee as they promise to pay / deliver the title.
What does bilateral contract means?
Mutual exchange of promises
What are the 7 essentials of a contract?
- offer
- acceptance
- consideration
- legal intention
- capactiy
- legal object
- genuine consent
As long as these essential elements are there, disregard the form of communication, the contract is binding.
What is a void contract?
A contract that never had any legal existence or effect and which is not capable of being enforced.
Money paid by one party to another will be repayable and no rights can be acquired under it.
What is an illegal contract?
An illegal contract is one which offends against public policy or against a particular statute. Illegal contracts are also void but the results of illegality might vary (for example: a person who has paid money under an illegal contract will not be able to recover the money even though the contract is void)
What is a voidable contract?
Both parties have the option to rescind the contract. Until it is rescinded, the contract is binding and valid.
What is an unenforceable contract?
A contract that has essentials of a valid contract but it cannot be sued upon for some procedural reason. (For example: Law and Equity Act requires that transaction affecting land to be in writing in order to be enforeceable in court, oral contract will not be enforceable)
What is an offer?
1, A promise made by one party to another
- It can be expressed in any form
- A proposal to do or refrain from doing something, followed by acceptance, counter offer, return promise or act.
- Person who makes the offer = offerror, recipient is offerree
What are the two important natures of an offer?
- It must be clear and unambiguous
2. It must be between A and B party only, no C
How should an acceptance be made? (2 answers)
- if the offer specifies how the acceptance should be made, the offeree should accept by that method
- if says nothing, the offeree should accept by the same method as the offer was itself made
What is Quantum Meruit?
A doctrine that means literally “ as much as he deserves”.
The law implies a promise to pay a reasonable amount for the labour and materials furnished, even though a specific contract price may not have been agreed to.
This principle will be applied when:
- no amount specified in the contract
- a breach of contract has occured and the ‘innocent’ party has performed part but not all of its obligations under the contract and wants to be paid for the partial performance
- contract is void and work has been performed
- original contract has been replaced by a new contract
What is an Option Agreement?
Fix time, with a fix price. Made enforceable when something valuable is given.. ( it is NOT DEPOSIT because the money will not necessraily will come back to you)
What are the documents you might need to have for a person claiming authority to act for the deceased?
- Grant of Probate (with will)
2. Letter of Administration (no will)
What is a Misrepresentation (under Genuine Consent)?
- false statement
- usually made in the negotiations before the contract is made
- must have induced the other party to enter into the contract
- Have induced a reasonable person to enter into the contract
Example: Buyer asks vendor if the house for sale has a new furnace. Seler says yes but actually the furnace is old and in bad condition. Relying on this statement, buyer purchases the house.
- the statement is false
- the seller induced buyer
- such a statement would induce any reasonable person to buy
