Contract Flashcards
What does satisfactory quality mean under the CPA 2015?
The Consumer Rights Act 2015 (‘CRA’) implies terms into contracts for the sale of goods between a consumer and a retailer that, amongst other things, the goods are of statutory quality (which means that they must be fit for the purpose for which they are usually supplied-here, cleaning teeth). Therefore (A) is correct. Many retail stores have policies allowing the return of unwanted or defective goods within a particular timescale, but they are under no legal obligation to do so, so (B) is incorrect.
A customer takes their suit to a dry cleaners for cleaning. On the wall behind the dry cleaners’ counter is a prominent notice which says ‘All cleaning is subject to our standard terms and conditions, a copy of which is available on request’. The customer leaves their suit with the dry cleaners and is given a ticket, but does not ask to see the terms and conditions. The terms and conditions say that the dry cleaners exclude all liability for any loss of or damage to items left for cleaning, however caused.
Is the exclusion of liability likely to be incorporated into the contract between the customer and the dry cleaners?
No, because the terms of the exclusion needed to be drawn specifically to the customer’s attention.
It is possible to incorporate terms, including exclusions of liability, into a contract by referring to them in a notice. However, the more onerous or unusual the term, the greater the effort required to bring it to the other party’s attention. This is a particularly broad exclusion of liability covering, for example, damage caused by the dry cleaner’s negligence. It is unlikely to be incorporated into the contract unless the exclusion itself (and not just the fact that all cleaning is subject to terms and conditions) has been drawn specifically to the customer’s attention.
What is restitution? When is it an appropriate remedy?
Where one party (usually the party in breach) has been unjustly enriched by their wrongdoing, that is, the breach of contract, the law may make an order for restitution to the innocent party. To take advantage of this, the innocent party is required to show that they have a legitimate interest in preventing the party in breach from retaining the benefit they have received. Restitution aims to return to the innocent party the gain that the party in breach has made, either in the form of money or property. Restitution usually applies where other remedies such as specific performance, damages, injunctions, or rescission are seen as inadequate.
When does the limitation period for breach of contract begin to run?
In a contract claim, the limitation period expires six years from the date of the breach. Here, the breach occurred on the date the delivery was missed (30 June 2020) and so the food supply company has until 20 June 2026 to bring a claim.
Formalities required for a guarantee?
Must be in writing. Does not have to be made by deed.
What is the parol evidence rule?
Generally, external evidence cannot add to, subtract from, contradict, or vary the terms of a written contract.
In a contract between businesses, the Supply of Goods and Services Act 1982 implies conditions that any services will be provided (1) within a reasonable time (if no time is agreed) and (2) with reasonable care and skill - are these implied terms a condition/warranty or innominate term?
Innominate terms.
True or false? Undue influence is based on whether the relationship between the parties has been abused and does not require proof of bad faith or unlawful conduct.
True
True or false? Rescission is available at the discretion of the court for all types of misrepresentation.
True
True or false? To recover damages for a non-fraudulent misrepresentation, the innocent party must prove that the misrepresentation was made negligently.
False. The innocent party need only prove that there has been a misrepresentation.
True or false? Under the Misrepresentation Act 1967, a court has discretion to award damages in lieu of rescission.
True, but only in cases of either innocent misrepresentation or negligent misrepresentation.
True or false? An agreement between the parties to discharge a contract is valid so long as one of the parties still has obligations to perform.
False, both parties must have unperformed obligations so that each party’s promise is supported by consideration.
What is the effect of the ‘entire obligations’ rule?
A party will be discharged from their obligations under a contract only when they have at least SUBSTANTIALLY performed them in full.
What are damages assessed on a quantum valebat basis?
market value or reasonable value - prevents unjust enrichment of one party. But only assessed on this basis if the party had a choice whether to accept the goods or not.
