Contract

Question 1

Condition

Answer 1

term so fundamental that it goes to the root of the contract - contract doesn’t work without it.
Innocent party can terminate contract and claim damages, but if they carry on with contract (affirm it) then can’t terminate - damages only

Question 2

Innominate term

Answer 2

unclear if warranty or condition, courts will look at effect of breach to determine the remedy
breach does not bring contract to an end

Question 3

Warranty

Answer 3

term that is incidental or collateral to contract
courts will look at effect of the breach to determine the remedy

Question 4

What are innocent party’s rights if other party doesn’t perform obligation at time required by contract?

Answer 4

depends if “time is of the essence”
if it is, the obligation is a condition so can terminate contract
if not, warranty so only remedy is to claim damages
presumption in commercial contracts that time is of essence if time for delivery has been agreed

Question 5

Parol evidence rule

Answer 5

general presumption that external evidence cannot add to, subtract from, contradict or vary terms of written contract

Question 6

Entire agreement clause

Answer 6

common term written in contracts that provides the document constitutes the entire agreement between parties
Court will uphold unless seen as attempt to avoid liability for misrepresentation

Question 7

Actionable misrepresentation

Answer 7

False statement of fact or law made by one party to induce other to enter into a contract

Question 8

Uberrimae fidei

Answer 8

Contracts of utmost good faith: incumbent on parties to make full disclosure as one party has knowledge essential to contract that is not possible to check

Question 9

Fraudulent misrepresentation

Answer 9

From tort of deceit
statement made knowingly, recklessly (careless as to whether it’s true) or without belief in its truth

Question 10

Negligent misrepresentation

Answer 10

Created by Misrepresentation Act 1967
any misrepresentation is actionable unless person making statement can show they had reason to believe it, did believe it until the contract was entered into
burden of disproving negligence is on party who made misrepresentation

Question 11

Innocent misrepresentation

Answer 11

Not made fraudulently or negligently, had reasonable grounds for believing it’s true
damages not available

Question 12

What contracts must be in writing?

Answer 12

Consumer credit agreements
Sale or disposition of interest in land
Guarantees

Question 13

What contracts must be by deed?

Answer 13

Conveyance of land
Promise where nothing received in return - promise to make a gift

Question 14

When is offer terminated by operation of law?

Answer 14

Death of either party
Destruction of subject matter
Supervening illegality
Failure of a condition in the offer

Question 15

When is revocation effective?

Answer 15

On receipt

Question 16

When is rejection effective?

Answer 16

On receipt

Question 17

When is rejection effective?

Answer 17

On receipt

Question 18

When is acceptance effective?

Answer 18

When posted

This doesn’t apply to instantaneous methods of communication: email acceptance effective when offer or opens email

Question 19

What contracts are minors bound by?

Answer 19

Necessaries: necessary goods or services at reasonable price
Employment
Permanent interest in property (unless expressly repudiate it)
If they ratify/adopt contract when they turn 18

Question 20

When is a contract entered into by someone who lacks mental capacity voidable?

Answer 20

If other party knew they lacked capacity
Only voidable by the individual who lacked capacity
Not voidable if they ratify it on recovery or contract was a necessary that they paid a reasonable price for

Same rule for intoxication

Question 21

Performance of an existing duty is not good consideration unless

Answer 21

It confers a practical benefit on party offering additional consideration (like avoiding a sanction)
Its promise to perform duty owed to a third party

Question 22

Part payments of debt - generally not sufficient as no fresh consideration/benefit
Exceptions to part payment rule:

Answer 22

Debt disputed in good faith
Unliquidated claims: amount owed is uncertain
Payment at different place or earlier payment
Third party makes payment
Payment made by different means at request of party accepting less amount
A composition w creditors

Question 23

Under CRPTA 1999, when does a third party have a right to enforce a contact?

Answer 23

Contract expressly provides they can
Or
A term of the contract purports to confer a benefit on the third party and it appears from the terms of the contract the parties intended it to be enforceable by the third party

Either expressly named or member of a benefiting class

Does not apply if contract explicitly says it won’t - common to have this clause in commercial contracts

Question 24

If third party has rights under a contract, parties can’t change it to their detriment without their consent if:

Answer 24

Third party has communicate their agreement to the term
Third party has relied on the term and the promisor is aware of it
Or
Promisor should have foreseen that the third party would rely on it and they have in fact relied on it

Question 25

If third party has rights under a contract, parties can’t change it to their detriment without their consent if:

Answer 25

Third party has communicate their agreement to the term
Third party has relied on the term and the promisor is aware of it
Or
Promisor should have foreseen that the third party would rely on it and they have in fact relied on it

Question 26

Common mistake

Answer 26

Both made same mistake
Usually regarding existence of subject matter

Question 27

Mutual mistake

Answer 27

Mistaken about different things
One party thinks subject is one thing but other party is intending another thing —> void because totally ambiguous contract

Question 28

Unilateral mistake

Answer 28

One party mistaken about terms and other aware
Ex. Errors in price —> no agreement between parties

Question 29

Mistake about identity

Answer 29

One party thinks they are contracting with someone else
Void if identity fundamental to decision to enter contract

Question 30

Non est factum

Answer 30

Sign document and it’s fundamentally different to what you think you’re signing
Not due to carelessness but because have special difficulties in understanding document

Question 31

Business efficacy test

Answer 31

Court will imply a term if it is necessary to make the contract work as intended

(Driving school must have insurance)
So can sue if don’t have it