Contract

Question 1

Auctions

Answer 1

Offer accepted when auctioneer’s gave goes down - bilateral contract.
Without reserve - sue auctioneer for difference of bid and value. Unilateral contract.

Question 2

Tenders

Answer 2

Unilateral contract.
Loss of opportunity.

Question 3

Postal rule

Answer 3

Letter of acceptance effective when posted -
Reasonable in all circumstances to use post.
Letter properly addressed, stamped, posted.
Postal rule not excluded.

Question 4

Termination

Answer 4

Rejection - expressly or impliedly - counter-offer.
Revocation - any time. Exception - offeree gave something in return to keep offer open.
Public - publish notice in same place, same prominence.

Question 5

Certainty and completeness

Answer 5

Objective.
Same trade.
Trade usage.
Whether agreement has been acted for any length of time.
Whether objective mechanism for resolving uncertainty.

Question 6

Intention to create legal relations

Answer 6

Commercial - strong presumption.
Domestic - no presumption.
Both rebuttable.
e.g. ‘binding in honour only’

Question 7

Consideration

Answer 7

Must be sufficient.
Need not be adequate.
Past consideration not good, exceptions -
Past act done at promisor’s request.
Mutual understanding between parties that compensation.
Had promise made in advance it would have been legally enforceable - intention to create legal relations.

Question 8

Contractual variation

Answer 8

Agreement, consideration, intention to create legal relations.

Question 9

Rule in Pinnel’s case

Answer 9

Accepting part payment in full and final settlement not binding on creditor.
Foakes v Beer (1884) - no new consideration - can sue.
Exceptions -
Some consideration for concession.

Question 10

Primary estoppel

Answer 10

Central London Property Trust v High Trees House [1947]
Defence.
Promise to waive strict legal rights.
Debtor must have acted on promise.
Ongoing payments e.g. rent - resume fill payment giving reasonable notice. Cannot claim back arrears.
Equitable doctrine - clean hands.

Question 11

Contracts (Rights of Third Parties) Act 1999

Answer 11

Contract expressly provides they may acquire benefit.
Term purports to confer a benefit on them.
Expressly identified - name, member of class, particular description.

Question 12

Agency

Answer 12

Actual -
Express or implied. Undisclosed principal.
Apparent -
Principal represented that agent had authority.
Third party must rely on representation, believing agent has authority.
Third party must alter their position.

Question 13

Minors

Answer 13

Not bound. Exceptions - necessaries - goods and services, for benefit.
Proform Sports Management Ltd v Proactive Sports Management [2006] - Rooney - not necessaries.

Question 14

Mental incapacity

Answer 14

Mental impairment, drunk when contract made.
Valid unless at time - person incapable of understanding nature of transaction and other party knew.
Voidable - binding unless person terminates it.

Question 15

Incorporation of express terms

Answer 15

Signature.
Reasonable notice.
Previous consistent course of dealing.

Question 16

Hong Kong Fir Shipping Co Ltd v Kawasaki kisen Kaisha Lts [1962]

Answer 16

Innominate term.
Breach deprived of it of sufficiently whole benefit.

Question 17

SGA 1979

Answer 17

S.12(1) - right to sell.
S.13(1) - goods correspond with description.
14(2) - satisfactory quality.
S.14(2A) - reasonable person would regard satisfactory.
S.14(3) - reasonably fit for purpose.
Strict liability.
13 and 14 - if slight, unreasonable to reject.

Question 18

SGSA 1989

Answer 18

S.2(1) - right.
S.3 - correspond with description.
S.4(2) - satisfactory quality.
S.4(5) - fit for purpose.
S.13 - reasonable care and skill.
S.14 - reasonable time.
S.15 - reasonable sum.

Question 19

CRA 2015

Answer 19

S.9 - satisfactory quality.
S.10 - fit for purpose.
S.11 - correspond with description.
S.17 - right.
S.49 - reasonable care and skill.
S.51 - reasonable sum.
S.52 - reasonable time.

Question 20

Consumer rights

Answer 20

Goods -
ss 9-11 -
Short term right to reject and full refund.
Right to repair or replacement.
Right to price reduction or final right to reject and get partial refund to reflect use of goods.
Pecking order.
Damages.
Service/work -
Reasonable skill and care - repeat performance where reasonable or price reduction.
Reasonable time - only price reduction.

Question 21

Contra proferentem rule

Answer 21

Uncertainty - clause constructed against person seeking to rely on it.

Question 22

Damages

Answer 22

Expectation loss/loss of bargain - claimant back in position.
Reliance loss - expenses incurred because of reliance on contract being performed.
Jarvis v Swans Tours [1973] - loss of enjoyment if main purpose is pleasure.
Remoteness - reasonable contemplation at time.
Mitigation of loss.
Cost of cure - reinstatement.
Ruxley Electronics v Forsyth [1996] - personal preference - loss of amenity and consumer surplus.
Specified - binding.
Penalty - pressure, extravagant or disproportionately high sum unenforceable.
Cavendish Square Holding BV v Makdessi [2015] - detriment on contract-breaker out of proportionate to legitimate interest of innocent party.

Question 23

Equitable and other remedies

Answer 23

Action for an agreed sum.
Specific performance.
Injunction.
Restitution - total failure of consideration or compensated for work/goods done.
Restitutionary damages - gains by defendant.
Opportunity to negotiate release fee.
Guarantees - secondary obligated, signed writing.
Indemnity - primary obligation.

Question 24

Frustration

Answer 24

Make performance impossible or radically different.
Something beyond ordinary risks parties could have expected when entering contract (force majeure, express provision).
Beyond the control of either party.
The Super Servant Two [1990] - self-induced.

Question 25

Law Reform (Frustrated Contracts) Act 1943

Answer 25

Money paid before event can be recovered.
Money that should have been paid before event need not be paid.
Court’s discretion - expenses incurred by payee can be recovered out out total sums paid/payable before event.
S.1(3) - valuable benefit before event - just sum

Question 26

Doctrine of of complete perfomance

Answer 26

Performance of contractual obligations must be precise and exact.

Question 27

Exceptions

Answer 27

Divisible obligations.
Substantial performance - slightly defective - 1/14 to rectify.
Wrongful prevention - damages or reasonable sum for restitution.
Voluntary acceptance of part performance - reasonable sum.

Question 28

Misrepresentation

Answer 28

An untrue statement of face made by one party to a contract, by words or contract, to the other contracting party, which induced the other to enter into the contract.
Silence - fiduciary relationship, utmost good faith, half-truth, change of circumstances - not disclosed.

Question 29

Fraudulent misrepresentation

Answer 29

With knowledge that it is false.
Without belief in its truth.
Recklessly - not caring true or false.
Damages - all consequential loss.
East v Maurer [1991] - innocent party in position be in had misrepresentation not been made. Tortious basis.

Question 30

Negligent misrepresentation

Answer 30

S.2(1) Misrepresentation Act 1967
Belief in truth of statement honestly held, not in reasonable grounds.
Misrepresentor prove reasonable grounds.
Damages same as fraudulent.

Question 31

Innocent misrepresentation

Answer 31

Reasonable grounds to believe statement true.
No recession.
Damages.

Question 32

Economic duress

Answer 32

Burden of proving on party alleging.
Pressure -
Practical affect - compulsion or lack of practical choice for victim.
Which is illegitimate.
Significant cause inducing claimant to enter into contract.
Factors -
Actual or threatened breach of contract.
Threat made in good or bad faith.
Victim protested at the time.
Voidable.
Remedy - recession - bars.

Question 33

Undue influence

Answer 33

Voidable. Recession. Damages.
Actual undue influence - proved on facts.
Presumed undue influence -
Relationship of trust and confidence.
Transaction must call for an explanation.
Royal Bank of Scotland v Etridge (No 2) - constructive notice -
Inquiry - non-commercial, not for joint benefit.
Reasonable steps to ensure surety aware - private meeting, advise independent advice from solicitor.

Question 34

Common mistake

Answer 34

Both parties.
Fundamental - render performance impossible or radically different from what anticipated.
Before

Question 35

Cross-purpose mistake

Answer 35

Crucial aspect.
Objectively impossible to resolve ambiguity.

Question 36

Unilateral mistake

Answer 36

Identity - genuine mistake where identity is vital to contract - void.
Cundy v Lindsay (1878) - rogue company - reputable company.
Bona fide purchaser already acquired goods - recession barred unless initial contract with rogue for mistake.
Lewis v Averay [1972] - mistake to attribute - creditworthiness does not invalidate - famous person.

Question 37

Illegal contracts

Answer 37

At time of formation - commission of legal wrong.
If incidental to performance - unlikely to affect validity.
Both aware - neither enforce.
If one unaware - innocent party can enforce.
Covenants in restraint of trade -
Legitimate business interest to protect. Restraint is reasonable - geographical area, duration, scope of prohibited activities.
Injunctive relief, damages.