Class7: Law of Contract Flashcards
(27 cards)
What is a contract?
This is a legally binding agreement between two or more parties
A contract may be . . . .
Oral, Written or Implied
Give the 2 types of contracts
Simple and Contract under seal
What is a contract under seal?
This type of contract is written, signed and sealed by all parties involved
What is a simple contract?
This is an informal type of contract made verbally or through mere conduct of the parties involved
List the 5 elements of a contract
Offer, Acceptance, Consideration, Intention to create legal relations and Legal capacity of parties
What is an Offer?
It is an expression made by a party towards another under specified terms
What are the 2 parties involved in the process of a flour?
Offeror and Offeree
What are some of the rules of the governing offer in contract laws
Be communicated to the offeree
Be definite and certain
What is an invitation to treat?
This is merely the willingness to negotiate, it is an invitation to offer
What are some of the ways in which an offer can be terminated in a contract
Rejection, Lapse of time, Death of parties, Insanity of parties, Counter offer, Revocation/Withdrawal.
What is acceptance?
A reply made to when an offer is made
what are some Conditions guiding acceptance
It must be unconditional
It must be a mirror image of the offer in contract
The offeree communicates with the offeror
What is an extra rule in acceptance?
Silence is not acceptance
What is the postal rule?
This means that an offer made by post is effective as soon as it is posted
Define Consideration?
This is when in order for a contract to be valid both parties should have contributed something of value
List some rules governing Consideration?
It must not be illegal
It must be made from offeror to offeree
It must be sufficient
It may be executed but must not be past
What is Intentions to create legal relations?
An offer must be made and accepted with the intention that their agreement is of legal consequence
Court guidelines used to determine the intentions to create legal relations are:
Parties to domestic and social agreements do not intend to be legally bound.
Parties to business agreements intend to be legally bound
What is Legal capacity to parties?
This means that it is taken under surveillance if the offeror or offeree is legally allowed to participate in contractual relationships
Mention the rules governing legal capacity to participate
Minors
Illiterates
Mentally disordered persons
Drunken persons
Define privity of contract
This means anyone who s not a party in a contract cannot enforce it
There are some exceptions to the privity of contract which are
Agency
Third party insurance
Assignment of her contractual rights
What is discharge of contract?
This is the termination of a contractual agreement and relation
