COMMON Q's Flashcards
define a contract
agreement giving rise to obligations which are legally binding and can be enforced / is recognised by law
what is a unilateral contract and how is it formed
contract in which only one party is bound. Formed by a unilateral offer, which may be an “offer to the world” (Carlill v Carbolic Smoke Ball Co) or other ‘reward’ cases. It is accepted by performance of the act stipulated by the promisor
what is privity of contract and case law
someone who is not a party to the contract cannot enforce rights under the contract or be subject to obligations under the contract, only the parties to the contract can sue or be sued under it (Tweddle v Atkinson / Dunlop v Selfridge)
exception to privity and the statute
s1 C(RTP)A 1999 can enforce if the contract expressly provides they may or if the term purports to confer a benefit on them. They must be expressly identified by name, as a member of a class or answering a particular description. Allows a third party to enforce but does not allow a third party to have a contract enforced against them
distinguish an invitation to treat from an offer with two case law examples
invitation to treat: invitation for offers or to open negotiations which cannot be accepted (Patridge v Crittenden) and offer: expression of willingness to contract on certain terms which the offeror intends to be bound by upon acceptance (Carlill v Carbolic Smoke Ball Co). Offers can be accepted and give rise to a contract unlike an invitation to treat.
what two things may show something in a scenario is an offer
indication of willingness (happy to sell, I am prepared to etc) / certain and detailed terms
how can an offer be terminated (4 ways & one case law for one)
rejection (counter-offer), revocation, lapse of specified time or reasonable time (Ramsgate Victoria Hotel v Montefiore), acceptance
distinguish a mere request from a counter offer and case laws
Mere request for information does not terminate (Stevenson, Jacques & Co v MacLean) unlike a counter offer which introduces new terms (Hyde v Wrench)
what are the three key rules about revocation of an offer and the case law for each?
must be communicated (Byrne v van Tienhoven) must be before acceptance (Payne v Cave) can be via reliable third party (Dickinson v Dodds)
what is battle of the forms + case law
when parties respond to each other’s offers with successive counter offers made on their own standard terms and conditions. Each successive communication constitutes a counter offer and terminates the last offer sent. The ‘winner’ is the last party to send a counter offer which is accepted by the other, as the contract is formed on these terms. (Butler Machine Tool v Ex-Cell-O).
what is acceptance, give case law for two key rules
final and unqualified assent to all terms of an offer. Must ‘mirror’ the offer. Must be communicated to be effective (Entores v Miles Far East Corporation). Silence is not valid acceptance (Felthouse v Bindley)
what is the rule for acceptance via modern mehtods + case law
determined by looking at parties’ intentions, sound business practice and where the risk lies (Brinkibon v Stahag Stahl)
what is the postal rule
an exception to the rule that acceptance must be communicated, postal acceptance is valid when sent not received (Adams v Lindsell), depends on if this is acceptable means in circumstances, usually applies to an offer which is posted. Must be properly stamped and addressed.
what is consideration, give case law for two definitions
the price of a promise (Dunlop v Selfridge) benefit to promise or detriment to promisor (Currie v Misa). Promises are only enforceable if supported by consideration
what is executory consideration
a promise to do something in the future
what is the rule in Pinnel’s Case
part payment of debt is not good consideration
what are the 5 exceptions to pinnel’s case
Payment before due date Payment with other goods (chattels) Settlement of disputed claim amount Composition agreement with creditors Payment made by third party
give the four main rules of consideration and supporting cases
must not be past (Re McArdle) / need not be adequate (Chappell v Nestle) / must be sufficient (Thomas v Thomas) / must move from the promisee (Dunlop v Selfridge)
what are the two rules re performance of duties and consideration + cases
existing public duty is not good consideration unless something extra added (Glasbrook Bros v Glamorgan County Council) / existing contractual duty not good (Stilk v Myrick) unless other party will obtain a practical benefit (Williams v Roffey) must be in absence of duress
what is the exception to the rule in Re McArdle + case
implied assumpsit, where the act is performed at the request of the promiser, it was understood that payment would be made and the payment would be legally recoverable if promised in advance. (Lampleigh v Braithwaite)
what are the rules on intention + cases
social agreements there is no intention (Balfour v Balfour) rebutted by breakdown of relationship (Merritt v Merritt) commercial agreements there is intention (Edmonds v Lawson) rebutted by express intention contract was in honour only (Rose & Frank v Crompton)
distinguish conditions from warranties + cases
condition is an important term which goes to the root of a contract, breach gives rise to rescission and damages / warranty is less important as it is collateral to the main purpose of the contract. Breach gives rise to damages but not rescission – compare Poussard v Spiers & Pond with Bettini v Gye
what is an innominate term
cannot be classified as either a condition or warranty at the time of formation of the contract. Damages can be claimed for any breach of an innominate term but can only terminate for breach if the breach is sufficiently serious (The Hongkong Fir)
how do courts decide if a statement is a representation or term and case law
courts consider importance attached to statement (Bannerman v White), whether it has been put in writing (Birch v Paramount Estates), passage of time between statement and contract (Routledge v McKay), any relevant special knowledge or skills of statement maker (Oscar Chess v Williams)
what are express terms
terms distinctly or overtly stated which are agreed by the parties
how are terms implied by law + case
as a matter of policy into contracts of a certain type where the nature of the contract implicitly requires it (Liverpool City Council v Irwin)
how are terms implied by the court on the facts + cases
must pass business efficacy test (is it necessary for the contract to make business sense) (The Moorcock) or officious bystander test (does it go without saying) (Shirlaw v Southern Foundries)
how are terms implied by custom
where there is existence of trade usage, or custom of long duration, certain and reasonable, and not inconsistent with an express term
how are terms incorporated into written contracts + cases
signature (L’Estrange v F Gracoub) / actual notice (Olley) or reasonable notice (Parker v South East Railway Co) / by consistent course (Hollier v Rambler Motors) / common understanding (British Crane Hire v Ipswich Plant Hire)
how is a contract discharged
performance, agreement, breach or frustration
what is entire performance rule + case
party must perform their own obligations precisely and exactly before they are able to demand performance of the other party (Cutter v Powell)
exceptions to entire performance + cases for 2
partial / substantial (Hoenig v Isaacs) / prevented (planche v Colburn) / severable obligations
what is frustration and its effect on a contract
occurs when without the fault of either party, an event occurs which renders performance of the contract impossible, illegal or undermines it commercial purpose. Must be something which was not anticipated or provided for, or self-induced by one party’s actions. Effect is to end the contract and discharge parties from future performance of it
what can frustrate a contract + cases
destruction of subject matter (Taylor v Caldwell) / supervening illegality (Fibrosa v Fairbarn) / government interference / illness or death of party (Condor v The Barron Knights) / non-occurrence of event which was sole purpose
what is a misrepresentation
false statement of fact or law which is intended to induce, and which does induce the party it is made to into entering into the contract. Must be statement of fact and not opinion
what is fraudulent misrep
knowingly false, without belief in its truth or with reckless carelessness as to its truth (Derry v Peek) Remedies are damages on tort of deceit and rescission
what is negligent misrep
falls within s2(1) of Misrepresentation Act 1967, representor cannot establish that they had reasonable grounds to believe the statement to be true and did believe it was true until the time of the contract (e.g. they could have easily found out the truth by checking something). Remedies are damages on tort of deceit and rescission.
what is innocent misrep
falls outside of s2(1) MA 1967. Burden of proof on representor to establish reasonable grounds that they believed the statement was true and believed in its truth up to the contract
when is silence considered a misrep 5
half truth / statement becomes false pre contract (With v O’Flanagan) / utmost good faith / fiduciary relationship / misleading omission within CPUTR 2008
what is rescission
Restores parties back to the positions they were in before the contract was entered into
how is remedy of rescission lost
affirmation, lapse of time, if it is impossible, if rights in subject matter have been acquired by a third party
what is specific performance
court order requiring a party to perform a contractual duty
what is injunction
court order preventing a party from doing something (Araci v Fallon)
`what does remoteness mean and give the two tests
if too remote, the loss is not recoverable. If arising naturally from a breach or in reasonable contemplation of the parties at the time of entering into the contract then it will not be considered too remote and the loss is recoverable (Hadley v Baxendale)
