Chapter 7 The Law of Contract: Common Law Flashcards
Provide a simple definition of a contract.
is a deliberate engagement between competent parties upon a legal consideration to do or abstain from doing some act.
What FIVE (5) elements are essential to a legally binding contract?
- Offer and acceptance (agreement)
- Capacity of parties to contract
- Consideration
- Genuine intention
- Legality of object
How must you make an offer when you want to enter into a contract?
- Offer must be definite
2. Offer must be accepted
How must an acceptance of an offer be made?
- Acceptance must be definite
2. Acceptance must be communicated
What is a counter-offer?
An introduction of a new term
Who does not have full capacity to contract?
- Minors (or infants)
- Other persons of diminished contractual capacity
- Corporations
- Native Peoples
Why are there special rules of contract with respect to certain classes of people?
Due to:
- Lack of ability
- Lack of competence
- Lack of capacity
Define consideration in the context of contract law.
is that which one gives or promises to give in exchange for the act or promise of the other party. The giving of consideration is evidence that the parties intended to be bound by the contract. The law does not recognize the validity of a contract in which there has been no consideration.
What is gratuitous promise?
A promise made by a person to another with the element of bargain absent. It is not a contract and not enforceable at law.
What is genuine intention?
The intention of the parties to create a legally binding agreement.
How do you determine whether the object of a contract is legal?
If the act doesn’t violate common law or statute law.
What is the difference between a void contract and a voidable contract?
- Void contract - is one that is treated as if it never existed. It cannot confer rights on anyone and does not have any legal effect.
- Voidable contract - can be affirmed or rejected at the option of the aggrieved party.
What FOUR (4) reasons might cause a contract to be set aside?
- Mistake
- Misrepresentation
- Undue influence
- Duress
Describe TWO (2) types of mistakes that may occur in contracts.
- Mistakes about the terms
2. Mistakes in assumptions
How can misrepresentation affect a contract?
Misrepresentation affects a contract by:
- innocent misrepresentation
- material fact
- fraudulent misrepresentation
- non-disclosure or concealment
What is a material fact?
is a fact that is so basic and important to the contract that withholding this fact could alter the terms of the contract or even cause it not to be made.
What is the difference between innocent and fraudulent misrepresentation?
Innocent misrepresentation - is an incorrect statement made innocently concerning a material fact which influences the other party to enter into the contract.
Fraudulent misrepresentation - is a false statement made deliberately or knowingly or with reckless disregard for the truth or as an intentional half-truth.
Give an example of a contract entered into under duress, and comment on its legal status.
Use of violence or threat of violence will never be legal. It does not contain all the elements of a legally binding contract. There is intention but there is no acceptance.
What are the methods of discharging a contract?
- Performance
- Agreement
- Frustration
- Operation of law
- Breach
If one part commits a breach of contract but the other party has already had some benefit from the contract, what action should be taken?
The other party cannot repudiate all liability on the contract
