Contract Law Flashcards by Louis Collins

What are the 2 Types of breach of contract?

A repudiatory breach
An anticipatory breach

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What is a repudiatory breach of contract?

A breach that occurs after the time to fulfil the contract terms has started.

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What is an anticipatory breach of contract?

A breach that occurs when a contract has been made, but before the time to fulfil the terms has came.

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When can you sue for anticpatory breach of contract?

Either:
* As soon as it becomes apparent that a breach will occur.
* When the breach actually occurs.

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What is express anticipatory breach?

This ocurs when one party announces in advance that they will not carry out the contract and will be in breach of contract.

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What is implied anticipatory breach?

This occurs when the party does not exprerssly state that they will not fulfil the contract, but does something that makes a breach inevitable.

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What are the 4 main remedies for breach of contract?

Damages
Specific performance
Injunction
Recscission

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Explain the remedy Damages.

The party commiting the breach of contract is required to make a payment to the injured party for the loss that the injured party suffered.

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Explain the remedy Specific Performance

The court orders the person committing the breach to carry out their obligations under the contract.

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Explain the remedy Injunction.

An injunction is a court order directing a person NOT to do something. This may be used to enforce a negative promise or undertaking in a contract.

A negative promise, is the promise to not do something.

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Explain the remedy Rescission.

Rescission is where the contract is void and the injured party can treat the contract as if it had never been made.

Note: Ther injured party can demand the restitution of all the money and

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Which of the following is a common law remedy for breach of contract?
A: Damages
B: Specific Performance
C: Injunction
D: Rescission

All of the answers

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What are unliquidated damages?

Unliquidated damages are when the court has to decide the amount of damages to be paid for a breach of contract.

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What is the intended purpose of damages?

To put the injured party back in the financial position that they would have been had the breach not occured and the contract fulfiled.

Note: Not to punish the party commiting the breach.

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What 2 issues does a court need to consider when deciding the amount of unliquidated damages?

The remotness of loss.
The measure of damages.

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Explain the term remoteness of loss.

It considers how “remote” a loss was from the breach and whether it is too remote to be included in the award of damages. A breach of contract may have some knock on effects that where not forseen when the contract was agreed.

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What are the 2 instances in which a damage will not be considered too remote to be included in the remedy?

The loss occured naturally as a result of the breach.
The loss did not occur naturally as a reult of the breach but both parties may have reasonably expected it to occur.

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What is the standard amount of damages?

Enough to sufficiently compensate the injured party for their loss suffered from the breach of contract.

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What is the Market Rule in relation to damages?

If buying goods & the seller is in breach - the loss is the difference in the price paid on the market & the price in the contract

If selling goods & the buyer is in breach - The loss is the difference between the price obtained in the market & the price in the contract

Note: if the injured party does not suffer a loss there will be no damag

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What is the duty to mitigate losses?

The injured party has a duty to take all reasonable steps to mitigate losses as a result of breach of contract.

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What is the exception to the rule that damages may not be awarded for anxiety, vexation or aggravation?

When the contract is intended to provide relaxation, pleasure or peace of mind.

E.g. When a holiday is cancelled at the last minute damages may be award

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What are liquidated damages?

Damages that are paid as a result of a term in the contract stating what damages should be in the event a breach of contract occurs.

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What is a penalty clause in a contract?

A contract term in which the amount payable for a breach of contract is deemed excessive in relation to the loss and will not be enforced by the court.

Note: in this case, the normal method for determining damages will be us

Name a type of contract in which freedom of contract not apply?

Hint: There are 4 options.

Any of the following:
1. Consumer credit legislation
2. Standard form contracts (such as customer to utility)
3. Employment contracts
4. Contracts restricted under legislation.

Finish: A deed is a specialty contract that must be...

In written form.

What is the presumption in domestic & social agreements?

That there was NOT intention to create a legally binding agreement.

What is the presumption in commercial agreements?

That there WAS an intention to create a legally binding agreement.

Where is the burden of proof on: 1. Domestic & social agreements 2. Commercial agrements

1. On the person claiming there was a legally binding agreement. 2. On the person claiming there was NOT a legally binding agreement.

True/false: A letter of comfort is a legally binding offer.

False | A letter of comfort is a Statement of intention, not a legally binding o

Give an example of an invitation to treat.

1. Advertisements 2. Shop window displays 3. Goods on a shop shelf 4. Catalogues

What 4 ways can a contract offer be terminated?

1. Rejection of offer 2. Making a counter-offer 3. Lapse of the offer. 4. Revocation

When can an offer be Revoked?

Any time before it is accepted provided the offeror knows.

An offeror deletes an acceptance email for a contract without reading it. What is the legal status of the contract?

The contract is considered to be accepted and has came into existance.

What are the requirements for acceptance under the postal rule?

* The letter has been posted (need not be recieved) * Has been properly adressed & stamped * Must be in the mind of both parties that post may be used.

What is meant by forbearence as a form of consideration?

Forbearing an act. To not do something or to give up a right or benefit.

What is executed consideration?

This means to give consideration now.

What is executory consideration?

This means to give consideration in the future. Ie a promise to pay for goods in the future (credit terms).

Consideration must be: 1. Adequate 2. Sufficient 3. Both

2. Sufficient | Consideration does not need to be adequate (A fair exchange of value)

What is deemed as sufficient consideration in contract law? 1. Executed consideration 2. Past consideration 3. Executory Consideration 4. Performance of an existing contract? | May be more than 1 Answer

1 & 3 - Executed & Executory consideration

What is Pinnel's rule in relation to part payment as a settlement of debt?

That payment of a lesser sum in satisfaction of a larger debt is not legally binding. | This is because there has been no consideration recieved for acceping th

What are the 3 exceptions to Pinnel's rule?

1. Composition with creditors 2. Part payment by a third party 3. Primissory estoppel.

What does it mean to be "estopped" under primisory estoppel docorine?

To be stopped from enforcing a legal right based on the law of equity (fairness).

John enters into a contract for building work with Allan on the basis that he hires Steve to do the electrial work because of a promise Steve made to complete any work faster than any competitor. What is the legal relationship between John and Steve?

John and Steve have also entered a Collateral contract and John maybe able to sue Steve for damages if there is a breach of contract.

Which of the following are contract terms? A. Conditions B. Warranties C. Represenations D. Innominate terms 1. A,B 2. A,B,D 3. C,D 4. All

2. A,B & D

True/False: If a condition of a contract is breached, the injured party can repudiate the contract. | Repudiate = Terminate

True

Ture/False: A warranty is a fundamental part of a contract, that is vital to its overall purpose.

False.

What is the remedy for breach of warranty?

The injured party may sue for breach of contract but not terminate the contract.

What is the remedy for a breach of an innominate term?

1. If the consequenses of the breach mean that the injured party loses the whole benefit of the contract, then they may terminate the contract. Treated like a condition. 2. If they do not lose the whole benefit of the contract, they may only sue for damages. Treated like a warranty.

What is an Express contract term?

These are contract terms that are actualy specified (in writing or orally) as terms.

What is an Implied Contract term?

A term that is not expressly stated but incluided as a term by implication.

What are the 3 main types of implied contract terms implied by?

1. Custom or usage 2. The courts 3. Statute

What is an Exclusion clause in a contract?

It is a contract term that aims to exempt or limit the liability for a breach of contract.

When would an Exclusion clause not be considered valid?

If it is considered an unfair contract term.

Under the Consumer Rights Act, in what time frame can you return faulty goods for a full refund?

Within 30 days of purchase.

Name an unfair term under the Consumer Rights Act

Any of: * Fees or charges hidden in small print * Something that limits the consumers rights * excessive charges for early termination. * Disproportionate charges for a default by the consumer

What are the 5 possible defects in a contract that could make a contract void?

1. Misrepresentation 2. Mistake 3. Duress or undue influence 4. Illegality 5. Incapacity

What type of misrepresentation is the following? A false statement made carelessly by the defendant. It does not need to be knowingly misleading but defendant should have taken reasonable steps to establish the facts.

Negligent misrepresentation