Contract Flashcards
Remedies the highest bidder buyer is entitled to when there has been an auction without reserve but the seller pulls out
Damages - not entitled to the goods themselves as these are dictated by a bilateral contract for sale.
When does a rejection take place?
When it is communicated to the offeror.
Rules for revocation
Can’t be after acceptance; communication is essential; means of communication do not matter; can revoke unilateral offer ant time before acceptance except maybe where offeree has partly performed the obligation and is willing to complete.
When does acceptance take place with instantaneous means of communication?
When the acceptance is received by the offeror. But e.g. a message was sent during ordinary office hours on Friday and only seen on Monday.- but it was held to have been accepted when received.
Rules for consideration as an existing contractural obligation between the same parties.
- Agreement to vary the contract so that the other party pays them more to do the same thing is not binding (stilk).
- If they exceed their existing obligations, there is consideration.
-Practical benefit (factual consideration) e.g. avoidance of late completion payment in contract, avoiding need to find an alternative contractor. e.g. obviate a dis benefit.
Rules for consideration as an existing obligation to a third party.
Can be good consideration - promisee will obtain the benefit of a direct obligation which he can enforce.
Agreements to accept a lesser sum as consideration
Debtor remains liable even where creditor has agreed to release them from further liability. But if you introduce a new element - e.g. payment at a different place or time or payment by something other than money, or a third party provides the consideration, the creditor cannot sue the debtor for the difference.
Rules regarding promissory estoppel
It acts as a shield and not a sword.
There must be a clear and unequivocal promise that strict legal rights will not be fully enforced.
There must be a change of position in reliance on the promise. Detrimental reliance is not necessary.
It must be inequitable to allow the promisor to go back on their promise.
What does an incapacitated person need to establish to make a contract not binding.
IT was not for necessaries, they did not understand what they were doing and the other party knew this to be the case.
Duress to the person v to goods
TO the person needs to be just one factor influencing the decision, for goods it needs to be shown that the agreement would not have been entered into if there had not been the duress.
What is the legal effect of duress
Contract is voidable, can lead to recession.
What elements are needed for economic duress.
Illegitimate pressure (e.g. threatened breach of contract, good faith/bad faith, DID VICTIM PROTEST/ AFFIRM - ? take immediate action or you’ll be deemed to affirm.)
A lack of practical choice
Significant cause in making the person enter the contract
Term v representation?
Timing, importance, reduction of contract into writing, special knowledge or skill, assumption of responsibility
Terms implied in fact include …
Trade or professional customs, course of dealing between parties, business efficacy.
SGA 1979 application and terms, breach
For business contracts
Implied terms as to title - s12
Correspondence with description s13
Satisfactory quality and fitness for particular purpose s 14
sale by sample s 15
Breaches of these are breaches of conditions. for 13-15, 15A provides that if the breach is so slight it would be unreasonable to reject to goods and repudiate the contract, it will be a breach of warranty and the buyer will only be able to claim damages. Burden of proving this falls on the seller.
SGSA 1982 application, terms.
Business contracts, for supply of services, hire of goods, transfer of property in goods.
terms: Care and skill (this is an innominate term), time of performance, consideration for reasonable charge.
CRA 2015 application, terms
Consumer contracts - goods, digital content and services.
Goods and digital content - satisfactory quality (reasonable person), fit for purpose, match description.
Services - reasonable care and skill, reasonable price paid, service provided in a reasonable time.
CRA remedies: Contracts for goods
Short term right to reject (30 days from when ownership has passed/goods have been delivered)
Short term right to repair or replacement - unless disproportionate or impossible.
Final right to price reduction OR final right to reject. This can only be used if after one repair or replacement, goods to not confirm, or consumer can require neither repair or replacement, or trader hasn’t repaired/replaced in a reasonable time.
- if final right to reject is exercised within 6 months there should be full refund with no deduction for use except for with motor vehicles and certain other goods.
CRA remedies: Contracts for digital content
Right to repair or replacement
Right to price reduction (only where can’t be repaired or replaced, or this hasn’t happened in a reasonable time)
Refund must be given within 14 days.
CRA remedies: Contracts for services
Right to require repeat performance
Right to price reduction.
Condition v warranty
Condition goes to the root of the contract .
Warranty = damages only
Condition breach = right or election - affirm and damages or terminate and damages.
Innominate term
neither conditions or warranties. Ask does the breach deprive the party not in default of substantially the whole benefit which it was intended he should obtain from the contract?
Controls on exemption clauses
- Incorporation - has the clause been validly incorporated?
- Construction - does the clause cover the alleged breach and resulting loss?
- Statutory controls - what is the effect of CRA and UCTA?
UCTA impact on excluding liability for loss from negligence
Excluding death or personal injury - void
Any other loss from negligence (ALSO BREACH OF STATUTORY IMPLIED TERMS AND BREACH OF CONTRACT) - valid if reasonable.
Reasonableness test = look at strength or bargaining positions, inducement, did they know about the term, Is it based on a condition to be complied with, were the goods manufactured to the special order of the customer.
CRA 2015 and exemption clauses
Exempting liability for death/PI from negligence - not binding on consumer
Breach of CRA implied terms digital and goods not binding
Breach of CRA implied terms s49 about reasonable care and skill for services - exclusions are not binging and restrictions/limitations are not binging if preventing recovery of price paid.
Illegality trio of necessary conditions?
Consider underlying purpose of prohibition that has transgressed and whether that purpose will be enhanced by denial of the claim.
Consider any other relevant public policy on which denial of the claim may have had an impact
Consider whether denial of the claim would be a proportionate response to illegality, bearing in mind punishment is a matter for criminal courts.
Contracts (ROTP) Act - in which circumstances can a third party enforce a term?
a. contract specifically provides for this.
b. agreement purported to confer a benefit on third party and it was not the case that the contracting parties did not intend the term to be enforceable by the third party. third party could be an unborn child.
Can put an exclusion of third party rights clause to avoid this.
Contracts (ROTP) remedies for third parties?
vary/rescind contract if third party has communicated his assent to the term to the promisor, promisor is aware that third party relied on the term, promisor can reasonably be expected to have foreseen that third party would rely and third party has in fact relief on it.
Affirming a contract after a breach limitations
Cooperation of breaching party is required.
Can’t affirm if innocent party has no legitimate interest, financial or otherwise in affirming the contract and continuing with performance.
There must be an unequivocal commitment to continue, and must mitigate loss. Contractural obligations remain and entitled to damages.
Frustration of purpose
principal motivation v common foundation of contract. Common foundation fail can lead to frustration
Consequences of frustration
money paid before frustrating act can be recovered. Money that should have been paid before no longer needs to be paid. Expenses incurred by payee can be recovered out of total sum paid or payable before the event.
