CONTRACT Flashcards
definition of contract
a legal enforceable agreement or a bargain
element of contract
- intention to create legal relations
- offer and acceptance
- consideration
purpose of contract law
to protect the reasonable expectation of the parties
definition of implied term
a term read-in by the court to the parties
bilateral contract
an exchange of promises, each party makes and promise to the other and in return.
unilateral contract
an exchange of an act for a promise, only one promise and one performance.
postal rule
for non-instantaneous communication, the offer is accepted when the offeree submits the acceptance.
general rule
for instantaneous communication, the offer is accepted when the acceptance is received by the offeror.
privity of contract
only the parties to a contract can enforce the contract as they are the only ones who paid for the bargain and exchanged promises for performance
exceptions: assignment, trusts, agency
misrepresentation
a false statement of a material fact intend to and did induce a contract.
innocent misrepresentation
a false statement of a material fact by one party who unware the statement was untrue.
fraudulent misrepresentation
a false statement of a material fact by one party known to be false or made willfully blind or reckless as to its truth.
implied term in Sale of Good Act
- the goods are of merchantable quality
- the goods are durable for a reasonable time
- the goods are fit for the particular purpose they were intended for
firm offer
the offeror has left the offer open for acceptance for a certain period of time
can be revoked, when the offeror withdrawn, offeror must communicate the withdrawal to the offeree
actual authority
a principle gives an agent the authority to do something on their behalf
the principle is bound by the acts of the agent
apparent authority
the reasonable impression that the principle gave the agent the authority to do something on their behalf, whether principle gave or not
ticket cases
the party issuing the ticket must draw attention to the exclusions of liability on the back of the ticket or on a sign at the ticket office
rescission
set aside a contract, place the parties in the position they were in before signing the contract
sufficiency consideration
anything of value
adequacy consideration
equality in exchange
option
collateral contract, the parties agree an offeror may accept the offer and the offeror may not revoke the offer for a certain period of a time
counter-offer
a rejection of the original offer, but a willingness to enter a contract on different terms.
counteroffer kills the original offer completely and forever, the original one is no longer exist
implied terms
- usage and custom
- good faith
- for particular purpose
duress
violence or a threat of violence to secure a contract
undue influence
a party is manipulated into entering a contract because of a special relationship
unjust enrichment
a form of restitution, requires the defendant to give back the benefit it received at the expense of the plaintiff
void
invalid from the start
voidable
valid unless set aside
(must within a reasonable time)
assignment
a transferring process, a party transfers its obligation and rights under a contract to the third party
frustrated contract
some events beyond control of the parties make the performance impossible or radically different from what was intended
frustrated
the subject matter of the contract no longer exists or is substantially different
delay and laches
a party fails to promptly avoid the contract, it will be deemed as valid and will not be able to get it set aside.
common mistake
the mistake is shared by both parties, the mistake is fundamental and directly affects what the parties agreed to.
is common mistake void/voidable
void
mutual mistake
the parties are at cross-purpose
is mutual mistake void/ voidable
void
non est factum
a party signs the document thinking it contains different terms because of the misrepresentation of the other party
is non est factum void/ voidable
void
condition subsequent
a term in the contract, if it occurs, terminates the contract
anticipatory breach
one party by words or action indicates it does not intend to fulfill the obligations when due.
the effect of anticipatory breach
the innocent party may discharge the contract and claim damages
breach of condition
a material term of the contract the breach of which would substantially deprive the innocent party of the benefit of the contract
contra proferentum rule
the ambiguous terms should be read against the party who drafted them
avoid unfair contract
- impossibility
- An innocent third party has acquired rights
- The party affirms the contract
- fails to avoid the contract promptly
forms of discharge
- rescission
- accord and satisfaction
- novation
- waiver and release
case of intoxication
the intoxication prevent the party from understanding the nature of the contract
effect of case of intoxication
voidable
definition if ratification
a principle approves a contract negotiated without his authority
ratification only fixes the document to reflect the true intentions of the parties, but will not rewrite
element of ratification
- must be clear
- must be within reasonable time
- must accept the whole contract
- must have legal capacity
- identify the principle at the time of the contract
