Contract Flashcards
Representations v terms
Representations induces someone to enter into a contract. Terms form part of the actual contract. Terms can be oral, but must be so important that a party would not ahve entred into a contract without them. Short interval between statement and agreement: more likely to be a term oral statement, less likely a term </li><li>statement by someone with a spescial skill to someone without is considered a term</li></ul>
Conditions v warranties
Conditions: essential terms. repudiation or damages.
Warranties: non-essential terms and only damages
Pakistan Airline v Time travels
Pakistan airline v TIme travels (2021): small travel agent was pressured into waiving commissions under a contract between the parties. The court set out that a claimant would need to establish the following for a successful claim of duress: (i) an illegitimate threat, (ii) that caused the claimant to enter into the contract, (iii) the claimant had no reasonable alternative to give in to the threat or pressure. Economic duress includes “lawful acts of duress” - where the threat is regarding a legal action. This is hard to establish and the supreme court have found two circumstances where behavior would be lawful act of duress: (i) use knowledge of criminal activity to obtain a personal benefit, and (ii) the defendant have exposed themselves to a civil claim and is forced to waive it.
Unjust enrichment - conditions
- enrichment of defendant
- at the expense of the claimant
- unjust if retained.
Categories of unjustment:
- mistake
- duress
- undue influence
- failure of consideration
- repudiatory breach
- frustration
- quantum meruit (choose to claim for loss under contract or value of goods provided before termination)
May be argued to
Promissory estoppel
A way of enforcing a gratuitous promise when the promisee did not provide consideration. Conditions:
(i) existing legal relationship (not necessarily a contractual relationship),
(ii) clear and unequivocal promise,
(iii) reliance on the promise,
(iv) it is inequitable to break the promise, and
(v) promissory estoppel solely suspends legal rights, it does not extinguish them (hence the promisor may assert original rights after providing notice).
High Trees case: landlord reduced rent to 50% during WW2 and after the war reduced it again. Court found that the landlord could not claim 100% rent for WW2 years as the tenant had relied on the landlords promise
UCTA - applies to + common restrictions
Applies to contract terms and notices which are non-contractual and seeks to exclude or restrict liability in tort. Does not affect incorporation or interpretation, which is solved under common law.
S. 2: cannot restrict liability for death or personal injury or death resulting from negligence (includes negligence from breach of contract, common law duty of skill and care and common duty of occupiers on premises (Occupiers Liability Act 1957).
S. 3 a person imposing a standard terms of business cannot restrict liability for their own breach unless the term is reasonable.
S. 6 cannot exclude that the seller had a right to sell or transfer goods
S. 7 can reasonably exclude conditions regarding quality of goods. Whether this is reasonable depends on: the parties bargaining positions, if customer received inducement (e.g. price reduction), if customer knew or ought to have known, if term restricts liability, if there is a special order.
Consumer Right Act 2015 (1. October 2015) - prima facia unfair terms
Consumer Right Act 2015 (1. October 2015)
Applies to agreements between traders and consumers and includes transfer of land (house purchase, tenancy etc.)
A term is “unfair” if contrary to good faith if it causes a significant imbalance in the parties rights and obligations to the detriment of the consumer.
Prima facia unfair terms:
Limiting liability of death and personal injury,
Limits or excludes consumers legal rights,
Realization depends on the traders will alone,
The trader will not pay back sums to consumer if the contract is not performed or concluded,
Consumer must pay the trader a high sum if the agreement is not concluded or consumer fail to fulfill obligations
Only trader can dissolve the agreement,
Trader can terminate agreement without notice,
Extends agreement where deadline not to extend is unreasonably early,
Includes terms the consumer has no chance to be acquainted with.
Negligent misstatement vs Negligent misrepresentation
Negligent misrepresentation/statutory misrepresentation is preferred as the conditions are easier to meet compared to fraudulent + remedy includes damagse without remoteness test and recission (voidable).
Negligent misstatement at common law: honest statement made by a person who has no reasonable grounds for believing it’s true.
Common law misrepresentation: when a representative owes a duty of care to the representee and acts carelessly in making the statement. The duty of care can arise if the person making the statement had a special skill or knowledge.
Remedy: Reasonably foreseeable damages at common law cf. Hedley Byrne v Heller: damages may be recoverable in tort where financial loss is caused by the negligent misstatement.
Negligent misrepresentation/statutory misrepresentation
statutory based on Misrepresentation Act 1967. The statute comes into force if the misrepresentation has led to the person entering INTO the contract. The misrepresentation is covered (does not have to be fraudulent) as long as the representee had “reasonable grounds” to believe and did believe it at the time of the contract. If the representor is not party to the contract, the representee cannot rely on the Misrepresentation act, but falls back on common law principles.
Remedy: damages (without remoteness test, same as fraudulent) and rescission (unless the court awards damages in lieu of rescission)
Mistake remedy
contract is void. can be mutual or unilateral mistake
Duress remedy
Duress: party is forced into contract by improper pressure. includes physial threats and cohersion, economic duress
contract is voidable.
Undue influence remedy
Recission. can be lost of the party under influence affirms the contract.
Actual undue influence: the transaction would not have happened but or the influence
Presumes undue influence: special relationship e.g. fiduciary, lawyer etd. trust and confidence is placed in the wrongdoer
Illegality contract remedy
Unenforceable. exceptions: parties are not at equal fault, illegal purpose is repudiated in time, claim is not founded on the illegality.
Frustration, conditions and effect
contract cannot be performed due to a change in circumstances and neither party are at fault. increased expenses or loss of profit isn’t enough. if alternative performance is possible there is no frustration.
Payer rule: money still owed cases to be due
Payee rule: money paid before the frustrating event is recoverable
Expenses rule: the court can award consideration to a party that has incurred expenses prior to the discharge in performance of the act.
Valuable benefit rule: if one party has obtained a valuable benefit based on the other party’s actions, other than payment of money, before frustration, he may be ordered to pay a sum in respect of it.
Contract, ways to calculate damages
Loss of expectation: Damages for loss of bargain to put the claimant in the position he would have expected to achieve, had the contract been performed.
Reliance loss: put the claimant in the position he would have been in, had the contract not been entered into
Loss of restitution: claimant can recover price of goods + interest when the price is paid but goods never delivered.
Loss of Amenity (behag): small damage due to loss of amenity and enjoyment, when this also was the purpose e.g. pool 6 fot in stead of 7.
Fatal accident claims - who can claim?
Loss of dependency (anyone dependent), bereavement (only spouse/partner and parents of an unmarried child), funeral expenses
Good consideration:
Promised consideration is enough for it to be a binding contract. It does not yet have to be paid. YES! A promise, action or inaction can be good consideration. E.g. promise to pay is enough! does not have to be money or adequate to the value of the goods. Contractual duty to third parties
Not good consideration: past consideration, existing public duty, existing contractual duty, partial payment of debt to forego all debt.
Discharge from contractual duty is only valid after consideration.
Which courts can bind other courts and when can they depart from their own rulings?
SUpreme court: not bound by its own previous decisions, but departing is unusual. Binds courts below.
Court of appeal: Binds courts below and is bound by the supreme court.
Can depart from its own decisions if:
- conflict with it
- it has been overrules by the Supreme Court
- it was made by carelessness
High court and other courts: bound by its own decisions unless:
- conflict with it
- it has been overrules by the Supreme Court
- it was made by carelessness
County court, magistrates family court and tribunals does not bind anyone.
