Chapter 3 - Law of Contract LO3 Flashcards
Unilateral contract
One person is legally bound. Once offer is accepted, the offeror is bound by their promise. e.g posting a reward for finding a pet
Bilateral contract
Each party is legally binding. Enforceable from when contract is signed
Void contract
Agreement that cannot be enforced, but not always from inception
Voidable contract
Agreement valid at inception
Rules of consideration (4)
- Real or genuine
- Need not be adequate - court won’t step in if you did bad deal
- Not be past
- Must move from promisee
Promissory Estoppel
Promise made without consideration cannot be enforced and will not complete a contract, but can be used as a defence to a legal action
Equitable principal
Deeds
Signed, witnessed, a lease more than 3 years
What age are Minors (family reforms act 1969)
Minor is under age of 18
Contracts made by minors which are binding
Necessaries, employment, apprenticeships
Contracts that are binding unless repudiated by minors
Repudiate contract meaning they can discharge themselves e.g leases, partnerships
Express term
Based on the words spoken by the parties or written down by them
Implied Term e.g consumer rights act 2015 can be implied in 3 ways
Implied in 3 ways:
1. In fact
2. By custom or usage
3. In law
Standard terms
drawn up by one party e.g personal lines such as motor, home
UCTA 1977 - Unfair Contract Terms Act 1977
Applies to B2B, restricted mainly to exclusion and limitation clauses, reference to reasonableness test with burden of proof
Consumer Rights Act 2015
Applies to consumer contract, covers all types of terms, subject to fairness test with burden of proof
What makes contracts defective
- illegality
- improper pressure
- mistake
- misrepresentation
- non-disclosure
Contracts contrary to law
involving the commission of a crime or tort
Illegality in insurance contracts
- No insurable interest
- Purpose of contract is illegal
- Unlawful use of insured property
- Close connection with crime
To have damaging effect misrepresentation must
- Be one of fact
- Made by party to the contract
- Induce the contract
Remedies for misrepresentation
- Recession (Avoidance)
- Damages
- Refusal of further performance
- Affirmation
CIDRA 2012
Duty to take reasonable care not to misrepresent
Contracts can be discharged by
Performance - both sides carried out their bargain
Breach
Frustration - Impossible or illegal to perform
Agreement
Operation of law
Remedies on contract
- Termination
- Damages (compensate the claimant not punish defendant)
- Specific performance and injunctions (equitable remedies)
Limitation Act 1980: Limitation periods
Does not apply for equitable remedies: simple, personal, deed
Simple contracts: 6 years
Personal Injuries: 3 years
Deed: 12 years
