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SQE 1 > Contract Law > Flashcards

Contract Law Flashcards

1
Q

Are goods displayed in a shop window an offer or invitation to treat?

A

Invititation to Treat

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2
Q

When can an offer be withdrawn?

A

Any time before it is accepted, even if the time limit has expired
The revocation must be communicated to that person (though this does not necessarily need to be done by the offeror)

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3
Q

How can an offer be accepted?

A

Through words or conduct
Silence does not amount to acceptance

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4
Q

What is the postal rule?

A

Acceptance is deemed as soon as has been posted

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5
Q

What are the exceptions to the postal rule?

A

Letter must have been properly posted.
Must have been reasonable to use post to accept the offer
Rule will not operate if its outlined that acceptance is deemed on delivery

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6
Q

When is instant methods of communication deemed effective?

A

If it is outside normal working hours, then it is deemed delivered the next working day

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7
Q

What is the general rule concerning consideration?

A

Consideration must not be past

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8
Q

What is privity of contract?

A

A contract can only bind and create obligations to those who are parties to the contract

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9
Q

What is the exception to the rule of privity of contract?

A

A party who is not party to the contract may enforce a term if
- a contract expressly provides that he may
- the term purports to confer a benefit onto him

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10
Q

What is an agency relationship?

A

WHere one party (the agent) is authorised either expressly or by implication to contract on behalf of the principal

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11
Q

When does an agent have apparent authority?

A
  • the principal represented that the agent had authority
  • Third party must rely on this representation
  • Third party must alter their position
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12
Q

What is a collateral contract?

A

A collateral contract is one where the parties to one contract enter into or promise to enter into another contract. Thus, the two contracts are connected and it may be enforced even though it forms no constructive part of the original contract.

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13
Q

When is it more likely for a statement to be a term than a representation?

A

If a statement is fundamental to the contract
The closer the statement is made to the creation of the contract
Where the person who made the statement has special knowledge or skill

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14
Q

What does the sales of goods and services act cover?

A

Contracts for services and works and materials contracts
Covers business to business contracts

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15
Q

Whats does the sale of goods act cover?

A

Business to business contracts
Sale of goods only contract

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16
Q

What does the Consumer Rights Act cover?

A

Business to Consumer Contracts

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17
Q

What is the remedy for a breach of a condition?

A

Entitled to repudiate the contract (terminate)
Claim Damages

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18
Q

What is the remedy for a breach of a warranty?

A

Damages

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19
Q

How can an exemption clause be incorporated into a contract?

A

Signing a document (though if signed through misrep then they will not be bound)
By Notice (must have reasonable notice before contract is entered into)
Course of Dealings

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20
Q

What under the CRA can not be excluded?

A

With respect to negligence, death or personal injury cannot be exc=luded under UCTA

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21
Q

What is the effect of a counter offer on the original offer?

A

It revokes the original offer

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22
Q

Does a request for flexibility in payment terminate the original offer?

A

No, it leaves the original offer open for acceptance

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23
Q

What is the general rule when two parties have their own standard terms of business (battle of the forms)?

A

General rule is that the ‘last shot prevails’.
The last set of terms sent by one party to the other before one the parties starts to perform obligations will apply to the contract

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24
Q

When are electronic acceptances deemed to be received?

A

When they are actually received (not when the offeror sees the acceptance)

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25
Q

When can’t the offeror revoke a unilateral offer?

A

Once the offeree has started to perform the act specified in the offer

26
Q

How should an offeror revoke a unilateral offer?

A

Same means as they used to make the offer

27
Q

What is the previous request device exception to?

A

This is an exception to the past consideration is not good consideration rule.
Where there is an understanding between the parties that the actions of one party will be paid for, the exact amount to be determined at a later date

28
Q

When can an amendment to a contract to pay more be enforceable?

A
  • the promisee provides consideration by doing more that was initially agreed
  • promisor obtains a practical benefit as a result of making the promise
29
Q

What is promissory estoppel a defence for?

A

against a promisor who agreed to accept a lesser amount than was originally agreed

30
Q

What is the criteria for promissory estoppel?

A
  • Must be a clear and unambiguous promise from the promisor that they will not enforce their rights under the contract
  • Applies to amendments to contracts, not formation
  • Promisee must have relied on the promise
  • It must be inequitable for the promisor to go back on his promise
31
Q

When can a person not be bound by a contract on the ground of mental incapacity?

A
  • Person must prove they did not have mental capacity at the time he entered the agreement and
  • person must prove that the other party to the contract knew, or should have known, that this was the case
32
Q

If the test for mental capacity, is the contract void or voidable?

A

It is voidable

33
Q

What is the criteria for a third party to acquire rights under The Contracts (Rights of Third Parties) Act 1999?

A
  • Contract must expressly state that the third party may enforce s term of the contract (either by referring to them by name or by class)
  • Term in the contract must purport to confer a benefit on the third party and no other provisions
34
Q

How can a third party acquire rights under assignment?

A
  • must be permitted under the terms of the relevant agreement
  • absolute (final)
  • in writing
35
Q

What is a representation?

A

An unambiguous statement of fact which induces the representee to enter into the contract

36
Q

What is a remedy for all types of misrepresentation?

A

Rescission unless this has been barred
(Affirmation, destruction of subject matter, third party rights)

37
Q

What are the criteria and remedies for fraudulent misrepresentation?

A
  • knew the statement was false or
  • did not believe the statement was true or
  • was reckless whether the statement was true or false

Remedies
- Damages
- Rescission

38
Q

What are the remedies for negligent misrepresentation?

A

At common law
- rescission
- damages (must be reasonably foreseeable)

Under Misrep Act
- Rescission
Damages

39
Q

What are the remedies for innocent misrepresentation?

A
  • rescission
  • no automatic right to damages but the court may exercise its discretion
40
Q

What are the two types of mistake?

A

Mutual mistake (where both parties make a fundamental mistake is respect of a contractual term)
Unilateral mistake (where one party to the contract has made a fundamental mistake in respect of a contract term)

41
Q

What is the remedy to mistake?

A

the contract is VOID

42
Q

What must a mistaken party provide evidence of to rely on unilateral mistake?

A
  • other party was aware of should have been aware of the mistake at the time the contract was made
  • the mistake was in respect of a term that induced the first party to enter into the contract
  • the mistaken party was not at fault
43
Q

What is the presumption of mistake as to identity in face to face scenarios?

A

Presumption that the mistaken party intends to deal with the person physically present, regardless of their identity

44
Q

What is the presumption as to mistake of identity in communications at a distance?

A

If a rogue writes to an innocent party pretending to be another person, the innocent party enters into a contract, the court will consider the identity of the other party as a term of the contract
Innocent party can therefore claim the contract is void

45
Q

Is the contract void or voidable if it is proven to be made under duress?

A

Voidable

46
Q

What is the definition of duress?

A

Illegitimate pressure by actions, threats of action to make a person to agree to do something.
Including
- physical violence or threats
- forcing a party to pay money for the release of goods wrongfuly held
- economic duress

47
Q

What is the definition of undue influence and what is its remedy?

A

wrongful influence or pressure by one person over another person so that such person does not act of their own free will

Remedy
- rescission
- contract is voidable

48
Q

When is there a presumption of undue influence?

A
  • Relationships that the law views as relationships of trust and confidence (parent/child, solciitor/client)
  • Relationships where one party placed trust and confidence in the other person
49
Q

What is the effect of illegality on a contract?

A

makes the contract void or voidable

50
Q

If an act is illegal under a statute, what happens to the contract ?

A

Contract is voidable

51
Q

When may the courts refuse to enforce contracts which conflict with the common law?

A
  • agreements that are contrary to public policy
  • agreements in restraint of trade (prima facie void)
52
Q

What is a repudiatory breach?

A

A breach of a major term of a contract which goes to the root of the contract and deprives the non-breaching party of the whole benefit of the contract

53
Q

What is the remedy for a repudiatory breach?

A

Gives the non-breaching party the choice to either discharge the contract or to affirm it

54
Q

What is an anticipatory repudiatory breach?

A

COmmunication from one party to another that the first party will not perform future obligations that go to the root of the contract and deprives the non-breaching party of substantially the whole benefit of the contract

55
Q

When is there a repudiatory breach under the Sale of Goods Act ?

A

If there is a failure of any of these conditions
- goods will match their description
- goods sold in the course of business are of satisfactory quality
- where goods are sold by sample the bulk will correspond to the sample in quality
*if the breach sis so slight that it would be unreasonable for the buyer to reject the goods, the relevant condition will be a warranty

56
Q

What is the possible remedy for a breach of a warranty?

A

Damages

57
Q

When will an innominate term be considered condition?

A

It is a condition if the breach deprives the non-breaching party of substantially all the benefit of the contract

58
Q

What is the definition of frustration?

A

Doctrine that automatically discharges both parties from their future obligations under a contract

59
Q

When may frustration occur?

A

Impossibility of performance
Illegal
Where the main purpose of the contract is lost

60
Q

What is the effect of frustration on claims for money?

A
  • money paid under the contract is recoverable by the party that paid it
  • money due to be paid no longer needs to be paid
  • if a person has incurred expenses, these can be recovered up to the amount they have already paid/been paid?

SQE 1 (12 decks)

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