Contract Flashcards
Approach of court to illegal contracts
Old approach: automatically void and unenforceable
New approach: discretionary considering whether recovery would harm the integrity of the legal system
Rules relating to acceptance by instant method (e.g. email)
Acceptance takes place at moment it is received by offeror
If acceptance is not received:
* Not offeror’s fault: no contract
* Offeror’s fault + offeree reasonably beleives acceptance is communicated: contract (offeror prevented from saying they did not receive acceptance)
When is a contract voidable for duress?
Contract is entered into as a result of actual or threatened violence.
Duress vitiates the contract
When is a contract for minor binding?
GR: Not binding UNLESS
- Contract for necessaries (includes food, clothing, goods, sometimes things which are not absolute essentials NEVER trading); or
- Contract for employment, education or training + for minor’s benefit (e.g. uses salary to pay education NOT agent)
When can a 3rd party enforce a contract term?
- Contract includes a term which purports to confer a benefit on them; or
- Identified by name, member of a class or answers a particular description (+ nothing to contrary)
Discharge of a contract (performance)
GR: no payment unless performed entirely and completely unless:
- Voluntary Acceptance of Part Performance (customer voluntarily acccepts part performance genuine choice / not abandoned) - quantum meruit (reasonable sum in restitution)
- Substantial Performance (cost of cure not more than 0.07 contract price) - paid full price minus cost of cure
- Divisible Obligations (stages) - paid in full for completed stages
- Wrongful prevention (no repudiatory breach) - quantum meruit (reasonable sum in restitution) OR damages for loss of profit (paid full price minus saved costs)
When is a contract void for unilateral mistake?
A reasonable person would not think there was agreement + mistake only by 1 party
when can C sue D for substantial damages for losses of a 3rd party?
D knew that the work is being undertaken for 3rd party and 3rd party woudl suffer in event of breach
When can a 3rd party sue D?
D makes a guarnatee / promise and is in breach
3rd party recommended to C to contract with D because of the promise
Recoverability of damages for losses suffered by 3rd partis
C can recover for others’ losses if they contract on their behalf for convenenience
Effect of an entire agreement clause
Excludes all extrinsic evidence from admissible evidence of contract terms (does not prevent a claim for misrepresentation)
comparative weight attached to an email containing terms specifically negotiated and agreed and a standard form contract
With or without signature, where special terms are specifically negotiated and agreed they usually prevail over standard terms.
When may someone be presumed to have a right under a contract?
Contract of convenience (provide consideration to employer to insure on behalf of all employees)
When might a face to face contract be void for mistake
Identity was critical - e.g. fraudster is not the person named in document
Identity is not critical if it is a mistake over creditworthiness
when is fit for purpose relevant and when is satisfactory quality relevant?
Fit for purpose: specific purpose made known
Satisfactory quality: not as reasonable consumers entitled to expect
