Contract and Tort Flashcards
What is a bilateral contract?
A bilateral contract is where both parties assume an obligation to each other.
What is a unilateral contract?
A unilateral contract is where one party makes an offer that calls for an act to be performed by one or more other parties.
What is required for a valid agreement?
One party must make a clear and certain offer displaying an intention to be bound, and the other party must unequivocally accept the offer.
How do courts determine if an agreement exists?
Courts take an objective approach, considering what a reasonable person would say was the intention of the parties.
What constitutes an offer?
An offer is an undertaking to be contractually bound by the terms of that offer upon unconditional acceptance by the offeree.
What is an invitation to treat?
An invitation to treat is a preliminary statement expressing a willingness to receive offers and cannot be accepted to form a binding contract.
Give examples of invitations to treat.
Examples include goods displayed in shop windows, advertisements for no reward, and auctions with reserve.
How can an offer be terminated?
An offer can end by rejection, lapse, or revocation.
What is a counteroffer?
A counteroffer is a response that introduces new terms or varies the original offer, which implies rejection of the original offer.
What happens to an offer if the offeree dies?
The death of an offeree will cause the offer to lapse.
Can a bilateral contract be revoked?
Yes, a bilateral offer can be revoked at any time before acceptance unless the offeree has given something in return for that promise.
What constitutes acceptance in a bilateral contract?
Acceptance is a final and unqualified assent to the terms of an offer communicated to the offeror.
What is the postal rule regarding acceptance?
Acceptance may be binding when posted if it is reasonable to send by post, properly stamped, and the offeror has not excluded the postal rule.
What is consideration in contract law?
Consideration is an act of forbearance by one party for the promise of something in return.
What must consideration be?
Consideration must be sufficient, meaning it is worth something in the eyes of the law.
What is promissory estoppel?
Promissory estoppel allows a contract to be enforced despite not being supported by consideration under certain conditions.
What is the presumption regarding intention to create legal relations in a commercial context?
There is a very strong presumption that the parties intended to create legal relations.
What is the doctrine of privity of contract?
The doctrine of privity states that only parties to a contract can acquire rights and be subject to liabilities under that contract.
What is actual authority in agency law?
An agent has actual authority if they have been expressly or impliedly authorized by the principal to contract on their behalf.
What is the difference between terms and representations?
A term is a statement intended to be binding, while a representation is a statement not intended to be binding.
What is required for incorporation of terms by notice?
Terms can be incorporated by notice if reasonable steps are taken to bring the terms to the other party’s attention before or at the time of contracting.
What does the Sale of Goods Act 1979 imply?
The SGA implies terms into sale of goods contracts that are not covered by the CRA.
What is an implied condition under Section 14(2) of the Sale of Goods Act?
There is an implied condition that the goods supplied under the contract are of satisfactory quality.
What does the Services Act 1982 (SGSA 1982) imply?
The SGSA 1982 implies terms into contracts for services, and contracts for work and materials that are not covered by the Consumer Rights Act (CRA).
What is the implied condition under Section 3 of SGSA 1982?
Where there is a contract for the sale of goods by description, there is an implied condition that the goods will correspond with the description.
What does Section 4(2) of SGSA 1982 state about quality?
Where goods are supplied in the course of a business, there is an implied condition that the goods supplied under the contract are of satisfactory quality.
What is the implied term regarding care and skill under Section 13 of SGSA 1982?
Where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill.
What does Section 14 of SGSA 1982 state about time for performance?
Where the supplier is acting in the course of a business and the time for the service to be carried out is not fixed by the contract, there is an implied term that the service will be carried out within a reasonable time.
What does Section 15 of SGSA 1982 imply about consideration?
Where the consideration for the service is not fixed by the contract, there is an implied term that a reasonable charge will be paid.
What is the scope of the Consumer Rights Act (CRA)?
The CRA applies to contracts made between a trader and a consumer.
What does Section 9 of CRA state about quality?
Every contract to supply goods is to be treated as including a term that the quality of the goods is satisfactory.
What does Section 10 of CRA state about fitness for purpose?
Every contract to supply goods is to be treated as including a term that the goods are reasonably fit for that purpose.
What does Section 11 of CRA state about description?
Every contract to supply goods is to be treated as including a term that the goods will match the description.
What is the implied term regarding care and skill under Section 49 of CRA?
Every contract to supply a service is to be treated as including a term that the trader must perform the service with reasonable care and skill.
What does Section 51 of CRA state about consideration?
Every contract to supply a service is to be treated as including a term that the consumer must pay a reasonable price for the service, and no more.
What does Section 52 of CRA state about time for performance?
Every contract to supply a service is to be treated as including a term that the trader must perform the service within a reasonable time.
What is required for the incorporation of exemption clauses?
A clause purporting to limit or exclude liability for a breach of contract or tortious duty must be incorporated in accordance with the ordinary principles.
What must an incorporated clause cover?
An incorporated clause must cover the breach of contract and loss or damage which has occurred.
What is the contra proferentum rule?
An unclear or ambiguous exemption clause will normally be construed against the person seeking to rely on it.
What is required to exclude liability for negligence?
Clear wording is needed to exclude liability for negligence.
What does UCTA 1977 impose on exemption clauses?
UCTA imposes statutory controls on exemption clauses contained in business-to-business contracts.
What is the rule regarding death or personal injury under UCTA?
A person cannot exclude or restrict liability for death or personal injury resulting from negligence; any such clause is void.
What does UCTA state about other loss through negligence?
A person cannot exclude or restrict liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness.
What does UCTA state about breach of sections 13-15 SGA?
Liability for breach of sections 13-15 SGA cannot be excluded or restricted except in so far as the term satisfies the requirement of reasonableness.
What does UCTA state about breach of standard terms?
Liability for breach of contract can be limited by a clause in a party’s standard terms in so far as the term satisfies the requirement of reasonableness.
What is required for a term to be considered reasonable under UCTA?
The term must have been a reasonable one to have been included, having regard to the circumstances known to or in the contemplation of the parties when the contract was made.
What does the CRA impose on exemption clauses?
The CRA imposes statutory controls on exemption clauses contained in trader-to-consumer contracts.
What does the CRA state about death or personal injury?
A trader cannot exclude or restrict liability for death or personal injury resulting from negligence.
What does the CRA state about breach of sections 9-11?
Liability for breach of sections 9-11 CRA cannot be excluded or restricted.
What does the CRA state about breach of section 49?
Liability for breach of section 49 CRA cannot be excluded but can be restricted to recovery of the price paid (as a minimum).
What is a condition in contract terms?
A condition is a major term ‘going to the root of the contract’. If breached, the innocent party can repudiate the contract and claim damages.
What is a warranty in contract terms?
A warranty is a contractual term of lesser importance than a condition. If breached, the innocent party is entitled to damages only.
What is an innominate term?
An innominate term is neither a condition nor a warranty and is classified based on the effects of the breach on the injured party.
What is actionable misrepresentation?
An actionable misrepresentation is an unambiguous false statement of fact made to the claimant which induces the claimant to enter the contract.
What does ‘induced’ mean in the context of misrepresentation?
‘Induced’ means formed one of the reasons for entering the contract. If the statement is material, inducement will be inferred.
What is the status of an opinion in misrepresentation?
An opinion is not a statement of fact unless it is not actually held or lacks reasonable grounds from a representator in a position of superior knowledge.
What is the status of a promise regarding a future intention in misrepresentation?
A promise regarding a future intention is not a statement of fact if the representor knows they cannot do what they state.
What is the status of silence in misrepresentation?
Silence is not a statement of fact unless there is a half-truth, failure to correct a false representation, or the contract is one of utmost good faith.
What must be proven for fraudulent misrepresentation?
The party alleging fraudulent misrepresentation must prove that the false representation was made knowingly, without belief in its truth, or recklessly.
What must be proven for negligent misrepresentation?
The party accused of negligent misrepresentation must fail to prove that they had reasonable grounds to believe the statement was true.
What must be proven for innocent misrepresentation?
The party accused of innocent misrepresentation must prove that they had reasonable grounds to believe the statement was true.
What is the effect of misrepresentation?
A contract/variation entered into as a result of misrepresentation is voidable.
What is a common mistake in contract law?
Common mistake occurs where parties make the same fundamental mistake.
What is a cross-purpose mistake?
Parties negotiate at a cross-purpose when they are both mistaken but about different things.
What is a unilateral mistake?
Unilateral mistake occurs where only one party is mistaken, and the other party knows of the mistake.
What is the effect of a common mistake about the quality of goods?
A common mistake about the quality of goods will not void the contract unless the mistake is so severe that it renders the subject matter ‘radically different’.
What is the exception for unilateral mistake regarding the nature of the document signed?
A mistaken belief as to the nature of the document is an exception if due to blindness, illiteracy, or a trick or fraudulent misrepresentation.
What is the presumption of identity in face-to-face transactions?
In face-to-face transactions, there is a strong presumption that the seller intended to deal with the person in front of them.
What is the presumption of identity in distance transactions?
In distance transactions, it is easier for the seller to prove they intended only to deal with the person named in the correspondence.
What is the effect of an operative mistake?
The effect of an operative mistake is that the contract will be void from the outset.
What is the difference between mistake and misrepresentation?
If misrepresentation is established, ‘voidable title’ passes to the fraudster; if mistake is established, the contract is void from the outset.
What is required for duress to the person?
For duress to the person, actual or threatened violence must influence the decision to enter the contract.
What is required for duress to property?
For duress to property, it must be shown that but for the threat to seize or damage property, the contract would not have been entered into.
What is economic duress?
Economic duress results when one party has a lack of practical choice due to illegitimate pressure.
What is the effect of duress on a contract?
A contract/variation entered into under duress is voidable.
What is the difference between duress and undue influence?
Duress deals with situations where consent has not been given, while undue influence involves a relationship of trust and confidence.
What are the types of undue influence?
Undue influence can be actual (proven) or presumed where there is a relationship of trust and confidence.
What relationships raise an irrebuttable presumption of trust and confidence?
Parent to child, trustee to beneficiary, doctor to patient, and solicitor to client.
What is the effect of undue influence on security contracts?
A security contract can be set aside if the bank had actual or constructive knowledge of undue influence.
What are the court’s remedies for undue influence?
Remedies are awarded at the court’s discretion; delay or lack of ‘clean hands’ may lead to refusal.
What are the remedial consequences of entering an illegal contract?
The consequences are within the court’s discretion, considering the integrity of the legal system.
How can a contract be terminated?
A contract may be terminated in accordance with the agreement on the occurrence of a specified event.
What is the doctrine of complete performance?
The doctrine states that a contractual obligation is discharged by precise and exact performance.
What is substantial performance?
Where the work is finished but slightly defective, the party is entitled to the full contract price less the cost of remedying the defect.
What happens if one party wrongfully prevents performance?
The innocent party can sue for damages or a quantum meruit.
What is voluntary acceptance of performance?
Where the innocent party accepts partial performance, the party in default is entitled to payment on a quantum meruit basis.
What are divisible obligations?
Where the contract is intended to be divisible, the performing party is entitled to payment for each part performed.
What is tender of performance?
A party may rely on the defense that they tendered performance if they unconditionally offered to perform and the promisee refused.