Chapter 3 - Law of Contract Flashcards
What are contract terms implied in fact
When not expressly stated in contract requirements, but when brought to court it is successful
In other words - the truth about events as opposed to interpretation
In contract law, acceptance of an offer
- May be implied by conduct
- Must exactly match the terms of an offer
Contract under seal
Formal contract which is in writing and is witnessed, sealed and delivered
Unilateral contract (offer)
Only one person is legally bound in a contract, e.g. if there is an offer accepted they are bound
Bilateral contract
Each party makes a promise to the other and they are legally bound
Promissory estoppel
Although a promise made without consideration cannot be enforced and will not complete a contract, it may be used as a defense to legal action
Contracts which must be under seal (contracts made by deed)
Contracts which must be signed and witnessed
Ratify
Sign or give formal consent
Repudiate
Refuse to accept
3 ways of implied terms
In fact = not stated but presumed
By custom or usage = the way the market works
In law = does not need to be explicitly stated
Warranty vs condition
Warranty affects minor term - suspension
Condition affects a major term - terminiation
Defective (therefore destroyed) contracts may arise from
- Illegality
- Improper pressure
- Mistake
- Misrepresentation
- Non disclosure
Why may a contract be discharged
- Performance
- Breach
- Frustration, e.g. death/destruction of property
- Agreement
- Operation of law
Remedies in contract
- Termination
- Damages
- Special performance or injunctions
- Other remedies inc limitation of action
Assignment
An original party to the contract may be able to assign (transfer) their rights under the contract to another who stands in their place
Equitable Assignment
Fair and valid. Must be informed and assignor must intrust the debter to discharge the obligation by payment to, or performance for, the assignee
Rights which cannot be assigned
Most ‘personal’ contracts
One of the requirements for the rule in Rylands v Fletcher to operate, is that there must be
A non natural use of land by the defendant
In contract law, acceptance of an offer
may be implied by conduct
must exactly match the terms of the offer
Under the Limitations Act 1980, the limitation period for persona injury claims are
3 years from the date of injury
For a statutory assignment to take place under the Policies of Assurance Act 1867, what must occur for there to be a legal assignment?
A written notice of assignment must be given to the insurer at its principal place of business
A gardener who was entitled to £2,000 under a contract with a private client assigned her rights under the contract to one of her plant suppliers. To be legally valid as a statutory assignment, this assignment must be
absolute (not diminished in any way)
After what period of time does an action for breach of a simple contract become statute-barred if the action is NOT in respect of personal injuries?
6 years
A gratuitous promise is contractually valid and binding on the promissor when it is
in the form of a deed
Adam had a contract with a specialist storage company to store some valuable paintings, but damp storage conditions resulted in damage to the paintings. Although Adam’s contract did NOT expressly state the storage requirements had to be suitable, he successfully sued the storage company on the basis that the contract terms were implied
in fact
An employers’ liability insurance policy can be classified as being a type of
o bilateral contract
o simple contract
Cancelling a debt by mutual agreement and creating a new debt in its place is known as
Novation
When an employee is contracted out from joining a rival it is known as a
restraint of trade
Contracts under seal vs simple contract
All contracts must be either of these 2
Contract under seal - is a formal contract which is in writing and has to be witnessed, sealed and delivered
Simple contract (Informal contract) = All other contracts
