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FLK1 > Contract Law > Flashcards

Contract Law Flashcards

1
Q

Contract

A

An agreement which the law will enforce

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2
Q

Elements of contract

A
  1. Parties in agreement
  2. Intention to be legally bound
  3. Consideration
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3
Q

What important contracts must be in writing (all others don’t)?

A
  1. Contracts of guarantee
  2. Contracts to sell land
  3. Consumer credit agreements
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4
Q

Offer to enter into a contract (offeror)
+
Acceptance (offeree)
= Contract

A
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5
Q

Requirements for a valid offer (three)

A
  1. Party making it is prepared to enter into contract (willingness)
  2. Terms of offer are sufficiently certain i.e. drink vs coffee (specific)
  3. Offer needs to be communicated to the other party (can be oral)
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6
Q

Requests for information are NOT offers

(Example: asking for price is NOT an offer)

A
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7
Q

Invitations to treat

A

Invitations to another to make an offer is NOT an offer

(Example: advert selling an item is not an offer to sell to those who want it as could be multiple buyers who would enforce a contract)

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8
Q

Invitations to treat - examples

A

Adverts
Price lists
Auctions
Tenders i.e. parties submit bids - submissions = offers and the one picked

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9
Q

Invitations to treat = NOT an offer = NO contract

Buyer can make an offer and seller can accept = contract formed

A
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10
Q

Unilateral contract

A

Contract where offeror promises to do something IF the offeree actually does something in return e.g. missing dog reward

Only way to accept the offer is to do the requested action

Promise not enough only action is enough

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11
Q

Terminating offers

A
  1. Revocation: offer terminated by offeror at any time before it is accepted BUT remember exceptions

Bilateral contracts (i.e. all apart from unilateral) can be revoked at any time until it is accepted

  1. Rejection: offer terminated by offeree
  2. Counteroffer
  3. Passage of time: limited time offer OR if not accepted in a reasonable time
  4. Operation of law: failure of a condition contained in the offer (explicit or implicit condition)
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12
Q

Offeror > revokes

Offeree > rejects

A
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13
Q

Situations where offeror can’t revoke offer

A
  1. Collateral contract: when parties enter into separate binding contract where offeror agrees not to revoke offer
  2. Unilateral contract:
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14
Q

Counteroffer = rejection and new offer

A
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15
Q

Acceptance

A

The offeree agreeing to be bound by the offer

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16
Q

How are offers accepted?

A

Bilateral contracts: performance or promise of performance

Unilateral contracts: performance only

Exception: a method of acceptance that’s just as advantageous as the method requested

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17
Q

Silence cannot be stipulated as a method of acceptance of an offer

A
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18
Q

Acceptance must be communicated to the offeror in some way

Can be by conduct and not words as long as the offeror is aware of the conduct

Action of accepting performance e.g. accepting delivery of goods is usually enough to act as acceptance of conduct

A
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19
Q

Terms of last offer will control what happens

A
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20
Q

Acceptance without any communication at all is possible only IF the offer specifically provides that acceptance need not be communicated

A
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21
Q

The postal rule

A

Acceptance by post creates contract at moment of posting UNLESS

  1. Letter wasn’t properly addressed and stamped
  2. It wasn’t reasonable to accept by post
  3. The rule has been excluded by the offeror (expressly or by implication)

IMPORTANT: only applies to acceptance NOT rejection or revocation

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22
Q

Rebuttable presumpiton parties did NOT intend a binding agreement

A
  1. Domestic family situations
  2. Social situations

Presumption can be rebutted if the circumstance show a different intent i.e an intent to be legally bound

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23
Q

Rebuttable presumption there is intent for agreement to be binding

A

Commerical and business agreements

Presumptions can be rebutted if the circumstance show a different intent

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24
Q

Who can lack capacity to be bound?

A

Minor (under 18)
Mental incapacity
Intoxication (alcohol/drugs)

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25
Q

A contract entered into by an individual who lacks capacity is voidable until such time that they restore capacity i.e. sober up/turn 18 etc.

BUT for mental incapacity and intoxication the contract is only voidbale IF the other party to the contract knew of their incapacity

A
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26
Q

Ratifying a contract

A

Choose to adopt the contract i.e. if someone who previously lacked capacity gains capacity e.g. drunk person sobers up then they can choose to ratify the contract so it becomes properly binding on them OR they can leave it

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27
Q

Someone who lacks capacity can enter into a contract to pay a reasonable price for goods or services which are necessary for them

No goods will be deemed necessary if the price is unreasonably high

A
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28
Q

Someone who lacks capacity can be bound by a contract where the contract is for the acquisition of a permanent interest in property e.g. land or shares in a company

A
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29
Q

Consideration

A

The act of each party doing something or promising to do something e.g. giving goods or money or land or a promise not to compete

‘Something’ = consideration

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30
Q

Executory consideration

A

A promise to do something

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31
Q

Executed consideration

A

Actually doing something

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32
Q

Consideration must move from the promisee

Example promising to pay someone for painting house

Promisee = painter
Promisor = payer

Person to whom the promise is made must give consideration in return

A
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33
Q

The promisee must give consideration in return (IMPORTANT)

This does NOT mean that consideration has to move from the promisee to the the promisor i.e. when consideration is given to a third party by carrying out an existing duty and not to the the promisor when they make a promise to the promisee - this is considered good consideration given by the promisee to the promisor even though it is by carrying out an existing duty to a third party

A
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34
Q

Consideration must be sufficient but need not be adequate

A

Sufficient consideration: must give or promise something that the law recognises as consideration e.g. 1p or 1 peppercorn

Adequate consideration: economic value - law doesn’t ask about the value of the consideration i.e. it need not be the economic equivalent of the consideration given by the other side - court doesn’t police the value of a bargain i.e. need not be a fair deal

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35
Q

Inadequacy of consideration may be evidence of a vitiating factor that could render a contract void or voidable because of mistake or duress

A
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36
Q

Illusory consideration = NOT sufficient consideration

A

Consideration that has no value at all - not sufficient - too hard to count and enforce

Example: promise to stop complaining

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37
Q

Situations where an act does NOT count as good consideration

A
  1. Performance of an existing duty
  2. Past consideration
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38
Q

Performance of an existing duty = NOT good consideration

A

It is not good consideration to agree to do something that you have already agreed to do e.g. agreed to fix lights (contract formed) then an hour later say will fix lights for £100 - insufficient consideration = no new contract and previous contract still stands

EXCEPTION 1: when someone owes the existing duty but agrees to do something more e.g. will come round earlier to fix the lights but will cost £100

EXCEPTION 2: if the existing duty is owed to someone else it can also be used sufficient consideration for

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39
Q

Performance of an existing statutory duty does not amount to good consideration

A

Example: owner of a pub offered to pay a police officer £50 per night to keep the peace in the pub while the officer was on duty - the officer would have given no consideration

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40
Q

Past consideration = NOT good consideration

A

Consideration that has already taken place is not good consideration i.e. if someone fixes a bike and then the other party promises to pay £10 for it this is not good consideration because the work has already been done

EXCEPTION - implied understanding of payment
It is different if the promisee understood they would always pay the promisor something to have their bike fixed i.e. somone takes a bike to be fixed at a bike repair shop they expect to pay something to have bike fixed and will pay whatever the price turns out to be - contract was made before the bike was fixed

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41
Q

Part payment of a debt

A

English law does NOT recognise a promise o accept part payment of a debt because there is no fresh consideration so it is not enforceable e.g. Anne owed Ben £500, Ben offers £450 in full and final settlement and Anne agrees. Anne can still sue Ben for the remaining £50.

EXCEPTIONS
1. Debt is disputed in good faith e.g. the debt is of uncertain value and so the debtor is providing consideration by agreeing to pay something
2. Unliquidated claims - amount owed is uncertain
3. Payment at a different place or earlier payment e.g. lesser amount paid earlier
4. Third party makes payment e.g. third party made payment on an agreement reached in good faith that the payment would discharge the debt
5. Payment is made by different means at the request of the party accepting the lesser amount e.g. good or services instead of money
6. Composition with creditiors - an agreement between a debtor in financial difficult and all their creditors that the debtor will pay an agreed amount in satisfaction of all their debts

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42
Q

Promissory estoppel

A

Situations where it is unfair for the creditor to go back on their promise to accept a lessor amount

Gives debtor a defence

Can’t form a basis of a claim

Suspends the creditor’s original rights, it doesn’t destroy them all together

Only works if it is inequitable for the creditor to claim the full amount

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43
Q

Contracts by deed do NOT need consideration

A
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44
Q

Giving up the right to litigate a good faith dispute is valid consideration

Example if pay a lower amount than previously agreed because the work quality was poor - fresh consideration is giving up the right to litgate

A
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45
Q

Privity of contract

A

Only the parties to a contract can sue under it or be sued by it

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46
Q

Exceptions to privity rule

A
  1. Contracts Rights of Third Parties Act 1999: third parties can sue to enforce their rights - the third party is included in the contract and so can enforce the contract - allows you to assign the right to claim under a contract but can’t use it to transfer obligations
  2. Agency: middle man agrees contract but contract can be enforced by third party who instructed middle man to create contract - the interest is enforced after the contract is formed
  3. Assignment: after a contract is formed one party directs the other to pay someone else instead i.e. they owed them the money so asked them to pay them directly - the interest is enforced after the contract is formed - allows you to assign the right to claim under a contract but can’t use it to transfer obligations
  4. Subrogation: limited to insurance and guarantees
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47
Q

Types of contract terms

A
  1. Conditions
  2. Warranties

Expressly or impliedly stated into a contract

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48
Q

Terms v representations

A
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49
Q

Condition v warranty

A

Condition: obligation that goes to the root of the contract - breach will repudiate the contract = can end contract and/or claim damages

Warranty: doesn’t go to root of contract - breach = damages only

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50
Q

Presumption in commercial contracts that time for delivery is presumed to be of the essence if a time for delivery has been agreed unless the contract says it is not of essence

A
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51
Q

Innominate terms

A

If you can’t tell if a statement is a condition or warranty = innominate term

Breach = depends on impact of the breach whether the contract can be ended

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52
Q

Express terms

A

Parties MUST have reasonable notice on a term for it to be express terms

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53
Q

Parole evidence rule

A

A written contract is presumed to contain all the terms that have been agreed

Can’t bring in external evidence to add to or vary the written terms

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54
Q

Implied terms

A

By statute

By the courts

55
Q

Implied terms by the courts

A

Only imply a term if it is necessary to make the contract work

Must be necessary to give the contract business efficacy

High threshold

56
Q

Agreement to agree

A
57
Q

Void for uncertainty

A
58
Q

Severing the uncertain term

A

Test: if the uncertain term is removed will this alter the essential bargain between the parties

59
Q

Exclusion/limitation clauses

A

A party won’t be liable if they breach the contract

OR

A party who breaches the contract is only going to be liable up to a certain amount

60
Q

Rules for exclusion clauses

A
  1. Incorporation: Clauses need to be incorporated into the contract at time it is made
    Three ways:
    a. by signature
    b. by notice i.e. informed of term before contract is made - if clause is onerous extra steps need to be taken to ensure notice is given
    c. by custom or course of dealing - must be regular and consistent dealing
  2. Construction: clause has to cover the liability that the clause is trying to exclude - matter of interpretation

Interpretation of what a term means = construction

Contra proferentem rule: if there is any uncertainty in the clause it will be decided against the party relying on it

  1. Legislation prohibits some exclusion clauses
61
Q

Different rules for exclusion clauses depending if it is a commercial or consumer contract

A
62
Q

Exam tip: clauses printed on a receipt or invoice are not incorporated in a contract as it is too late - contract already formed and it is not on a contractual document

A
63
Q

Contra proferentem rule

A
64
Q

Statutory rules on exclusion clauses

A

Unfair Contract Terms Act 1977: between businesses

Consumer Rights Act 2015: between business and consumers

65
Q

Unfair Contract Terms Act 1977

A

Some exclusions are void:
1. Death or injury by negligence
2. Exclusion of the implied condition that a seller must have good title to the goods (Sale of Goods Act 1979)

Other exclusions are valid only if reasonable

Reasonableness test: was it reasonable to include exclusion term at time contract was made?
1. Quality -
2. Contracts on standard terms - any exclusion clauses must be reasonable

Rules apply to exclusion and limitation clauses i.e maximum amount set

66
Q

Consumer Rights Act 2015

A

Prohibited terms are unenforceable

Any attempt to void the implied terms about quality of goods and services is prohibited

A term is unfair if it causes an imbalance between the parties

Terms must be transparent (plain language) and legible - unfair if not

Unfair terms are not binding on the consumer

Potentially unfair terms:
1. Exclusion for death or injury

EXCEPTION TO CRA 2015:
Doesn’t apply for terms which are specific to the main subject matter of the contract e.g. price would not be caught by the unfairness test BUT core terms must be transparent and prominent in the contract

67
Q

Vitiating factors

A

Factors that prevent a contract from being effective

68
Q

Void contract

A

Has no effect

When?
1.Mistake
a. Common mistake: both parties make the same mistake e.g. a ship sank (before contract) so couldn’t be sold
b. Mutual mistake: parties are mistaken about different things e.g. both parties think they’re talking about same boat but actually different boats with same name
c. Unilateral mistake: one party is mistaken but the other party knows of the mistake or should know e.g.

Neither apply if the mistake was about quality - contract will NOT be void but could be a breach instead

Mistaken identity: depends how important identity is to other party i.e wouldn’t have entered into contract tif knew true identity - void if important

d.Non est factum: protects those who sign a document in mistaken belief that it represents something else e.g. footballer thinking they signed autograph actually signed a contract

e.Rectification: parties agree on terms but they are incorrectly recorded in writing

  1. Illegality
69
Q

Voidable contract

A

Remains in effect unless rescindable by a party

When?
1. Lack of capacity
2. Duress
3. Undue influence
4. Misreprentasentation

70
Q

Duress

A

Makes a contract voidable NOT void

One party applies illegitimate pressure to the other party

  1. Duress of party e.g. sign this or I’ll kill you
  2. Duress of goods e.g. one party holds onto other party’s goods until they sign the contract
  3. Economic duress: one party is in a stronger economic position and uses that to force the other into a contract - likely to be variations of the contract that are voidable for duress rather than entire contract
71
Q

Undue influence

A

Makes a contract voidable NOT void

One person abusing their influence over the other BUT does NOT have to be in bad faith i.e. pressure on party to enter into a contract or they will issue court proceedings

Based on personal relationship between the parties - unlikely to arise in personal situations

  1. Actual undue influence: innocent party proves that the other abused their relationship
  2. Presumed undue influence: if there was a relationship of trust and one party entered into a relationship that is so unfavourable to them that an explanation is required from the other party who would have to rebut it e.g. parent and child or fiduciary relationship i.e. solicitor and client

Law does NOT presume a relationship between spouses is a relationship of trust so MUST prove this unlike mother/child relationships etc.

Third party undue influence: undue influence by a party who is not a party to the contract e.g husband gets wife to enter into a financial transaction with contract with someone else normally a bank - bank deemed to know about husband and wife relationship so unless bank can provide explanation then wie can void contract

72
Q

An acceptance is effective when it is posted BUT rejection is effective when received

A
73
Q

For an offer to be validly accepted, the offeree must have communicated their acceptance of the offer to the offeror

A
74
Q

An invitation to treat is an expression of willingness to negotiate, which falls short of a valid offer

A
75
Q

Supply of Goods and Services Act 1982

A

When goods are supplied under a contract for services, all the statutory implied terms are implied by this Act. These terms include conditions relating to the goods similar to those which would be implied by the Sale of Goods Act 1979 in the case of a sale of goods contract. They also include terms (which are ‘innominate’ terms) that the work will be carried out with reasonable care and skill, and that it will be carried out within a reasonable time if no time for performance has been agreed

76
Q

Vitiating factor: illegality

A

Illegal contracts are void e.g. you agree to rob a bank - your friend can’t enforce the contract

Illegal performance e.g. courier agrees to deliver parcel but is drunk driving - customer can still enforce contract if didn’t know of illegal act but courier may struggle to enforce contract against customer

Courts will try and severe the illegal element of contract

Immoral contracts e.g. prostiution

77
Q

Vitiating factor: misrepresentation

A

A misrepresentation is a false statement of fact or law made by one party which induces another party to enter into a contract

Elements:
1. Statement made by one party or their representative
2. Statement has to be of fact or law NOT of opinion or intention (e.g. will spend money or expansion but spends on debt repayment BUT if a person making a statement of intention does not actually hold that intention then it might still be a misrepresentation)
3. Actual statement need - oral or in writing or by conduct (e.g. walk in to restaurant and order - representing that have money to pay - made a statement through conduct)
4. Silence usually not misrepresentation BUT exceptions:
a. Contracts of utmost good faith e.g. insurance contracts - policy holder under duty to disclose all relevant facts to insurer and if they don’t then it’s a misrepresentation - even if not asked question directly
b. Duty to correct - if a statement made before contract entered into is later not true must NOT remain silent and MUST correct statement or true statement will turn into misrepresentation

78
Q

Deciding if a statement is a term of a contract or a misrepresentation:

Misrepresentation would not be a term of the contract and so the false statement is NOT a breach of contract

A
79
Q

Representor: person making false statement

Representee: person believing false statement

A
80
Q

Types of misrepresentation

A

3 types: fraudulent, negligent and innocent

  1. Fraudulent: representor made false statement knowingly, recklessly or without belief in its truth

Misrepresentation Act (decides if non-fraudelent statements are misrepresentation):

a. Innocent representation: representor can prove they had reasonable grounds for believing their statement was true and they believed it to be

b. Negligent misrepresentation: not fraudulent but representor can’t prove reasonable grounds for believing their statement was true

81
Q

Misrepresentation: remedies

A

Misrepresentation = voidable - representee can choose to rescind the contract by telling the other party or by going to court AND can claim indemnity from representor

Rescission = equitable remedy

82
Q

4 bars to rescission

A
  1. Affirmation: if you know the representation is false and you carry on with the contract anyway = affirming = can NOT rescind contract
  2. Lapse of time: if innocent party does NOT act promptly to rescind = rescission denied
  3. Impossibility of restitution: if it is no longer possible to put the misrepresented substantially back in the position they were in before the entered the contract
  4. Third party rights: if an innocent party has acquired rights in the subject matter of the contract e.g. seller sells car to buyer but cheque bounces, buyer sells car on to third party - court won’t grant recession even though cheque bounced
83
Q

Paying by cheque is a representation that the cheque will be honoured

A
84
Q

Misrepresentation: remedies

A

Fraudulent misrepresentation: recession and/or damages

Negligent misrepresentation: recession and/or damages

Innocent misrepresentation: damages not available but court MAY award damages in lieu of recession

85
Q

Any attempt to exclude liability for misrepresentation is only valid if reasonable (reasonableness test)

A

Reasonableness test:
- Strengths of parties bargaining position
- Alternatives available to the customer
- Whether the innocent party knew of the term

86
Q

Ways to discharge a contract

A
  1. By agreement
  2. By performance
  3. By breach
  4. By frustration
87
Q

Discharge of a contract = bringing to an end - releases all parties from any obligations under the contract for the future

A
88
Q

Discharge by agreement i.e. end employment by working 4 weeks notice OR if not stipulated in contract can make an agreement (which forms a new contract)

A
89
Q

Agreement of part payment of a debt = variation of a contract (needs to be supported by consideration)

A
90
Q

Waiver principle

A

If one party promises not to enforces the others obligations under the contract - then the party has waived their obligations - equity will stop them from going back on their promise

Party who waived rights can reinstate them by giving the other party REASONABLE NOTICE

91
Q

Discharge by performance: once both parties have performed all their obligations and the contracts discharged (entire obligaitons rule)

A
92
Q

Exceptions to entire obligations rule

A
  1. Substantial performance: if contract has been substantially performed then party can claim payment for their performance e.g. kitchen extension substantially completed then builder can claim payment subject to other party’s right to claim damages for defective and incomplete performance
  2. Divisible contracts: mini contracts within main contract (doesn’t need to be explicit court may rule that contract is divisible) e.g. huge construction project will likely have payment due as each stage is completed - entire obligations rules applies separately to each part of the contract
93
Q

Quantum meruit

A

A way of fixing a payment outside the contract e.g. payment for partial completion

94
Q

Discharge: by breach

A

A contract isn’t automatically discharged if one of the parties breaches it BUT the innocent party can choose whether to discharge the contract or not

Breach of a condition or an innominate term AND it’s so serious it’s treated as a breach of condition

Breach is so serious it’s a repudiation of the contract

95
Q

Anticipatory breach

A

The contract can be terminated from when the party says they are not going to perform their obligation i.e. do not have to wait until date of agreed performance to see if party does perform

The same applies for damages - don’t have to wait

BUT can wait to see if party backtracks and does perform obligation

Example: agree to buy boat from seller in September but in June seller says they don’t want to sell - can rescind now and claim damages before September

96
Q

Frustration

A

An unforseen event, after the contract is formed, which either stops the contract from being performed or makes performance radically different

Examples: item being sold is destroyed OR performance of contract becomes illegal after contract was formed

97
Q

Frustration occurs AFTER the contract was formed

A
98
Q

Law Reform (Frustrated Contracts) Act

A

All sums paid before discharge can be recovered i.e 50% deposit would be recoverable

All sums payable before discharge cease to be payable i.e. no further payments are payable

But a party may retain the amount of expenses i.e. if they had been paid a deposit already they will have to return the money minus the cost of expenses

But the court can’t order a party to pay a sum already paid i.e. if no deposit was paid then they can’t claim for the cost of expenses - will be out of pocket

A party may have to pay for a valuable benefit e.g. a kitchen extension was partially built but builder dies - court may require payment of the value of the kitchen that has already been built to be paid to the builders estate

99
Q

Remedies for breach of contract

A

Damages: to compensate innocent party for loss NOT to punish for breach

Intended to put innocent party in the position they would have been in had the contract been performed

100
Q

Expectation interest

A

Compensation to put the innocent party in the position where they would have been if the contract had been properly performed

BUT can be hard to quantify e.g. potential profits made by TV company

101
Q

Cure measure
vs
Value measure

A
102
Q

Reliance interest

A

Can be claimed instead of expectation interest e.g. expenses incurred - film company who couldn’t shoot film as actor quit could claim for cost of adverts, other actors etc.

103
Q

Damages in contract law are awarded for:

A
  1. Monetary losses
  2. Lost profits
  3. Damage to property
  4. Physical injury
  5. Loss of reputation

BUT not for disappointment or mental distress BUT some exceptions e.g. loss of amenity (awarded if the purpose of the contract was to provide a particular benefit in terms of enjoyment e.g. holidays)

104
Q

Damages are usually assessed as of the date of breach e.g. damages for aniticpatory breach is calculated from the date the party announces they will breach the contract

A
105
Q

Remoteness of loss (KEY FOR EXAM)

A

To recover damages losses can’t be too remote

Losses must either:
1. Flow naturally from breach
OR
2. Be in reasonable contemplation of parties when contract is made

106
Q

Contributory negligence

A

A defence to a claim in contract IF the defendant is under the same duty in both contract and tort i.e. same duty would have arisen in tort even if there had been no contract

107
Q

Mitigation

A

The innocent party must take reasonable steps to minimise their loss

Innocent party can’t recover damages for losses that they should have been able to avoid if they had mitigated their loss e.g. electricians van is being repaired and will take longer than agreed - electrician can mitigate by hiring a van and claiming for the cost of the hire

108
Q

Liquidated damages clauses

A

A clause where a party promises to pay a specified sum if they breach their obligations under the contract

Courts will upload liquidated damages clauses UNLESS unless it is a penalty i.e. if it doesn’t protect a legitimate interest or if the amount charged isn’t proportionate to protect that interest

109
Q

Equitable remedies (discretionary)

A
  1. Specific performance: an order requiring a party to perform their obligations - rarely used unless subject matter of contract is unique e.g. rare painting - not granted if damages are adequate remedy
    EXCEPTION: personal services e.g. job contract - employer fires employee but court would not make employer reemploy employee (too many issues)
  2. Injunction: an order requiring a party not to do something i.e. not to breach a contract - rarely used - not granted if damages are adequate remedy
110
Q

Personal services contract

A

No specific performance
No injunction

111
Q

All equitable remedies have special defences

A
112
Q

Restiutionary remedies

A

Available when
1. Someone has been enriched or benefitted
2. Enrichment is at expense of other party
3. Enrichment is unjust
4. There are no defences e.g. waited too long

113
Q

Total failure of consideration

A
114
Q

For frustration to apply, the contract must be incapable of being performed, not just more difficult or expensive.

A
115
Q

A misrepresentation is a false statement of fact or law (NOT of opinion) made by one party to another to induce the other party to enter into a contract

A
116
Q

Contracts by deed

A

Makes clear on its face that it’s intended to be a deed

Must be executed by the parties in the presence of a witness and delivered

Delivered means the parties must have shown their intention to be bound

117
Q

Dead v contract not made by deed

A

Time limit in which a claim for breach must be made varies

Contract not made by deed = up to 6 years from date of breach

Deed = up to 12 years from date of breach

118
Q

Revocation

A

Offeror may revoke by directly revocation to offeree at any time before acceptance

Offer may be revoked indirectly i.e by third party and not offeror

Revocation must be received by offeree

Offer can be revoked even if there was a promise not to revoke EXCEPT if a collateral contract was formed to prevent revocation

119
Q

Revocation: unilateral v bilateral contract

A

Unilateral: irrevocable once performance has begun BUT still no contract until offeree has completed performance so can withdraw at any time

Bilateral: irrevocable once performance has begun - beginning performance constitutes acceptance and contract is formed immediately

120
Q

A mere enquiry/request for further information will NOT terminate an offer

Test: whether a reasonable person would believe that the original offer had been rejected

A
121
Q

An agreement to keep the original offer open = collateral contract SO a rejection of or counter offer to the collateral contract does NOT terminate the original offer

A
122
Q

Offeree must know of offer i.e if the offeree acts without knowledge and later learns of the offer their acts are not an acceptance

A
123
Q

Postal rule: acceptance effective ON POSTING

BUT revocation and rejection effective ON RECEIPT

A
124
Q

Postal rule does NOT apply to instantaneous methods of communication e.g. email

Offer accepted at point it is received i.e. when email is opened

A
125
Q

A battle is won by the person who fires the last shot i.e. a contract is formed after the last set of terms is sent and not objected to and performance of the contract has begun

A
126
Q

Prevail clauses: offeror includes a term stating their terms will prevail BUT rarely effective as the offeree can make a counteroffer to enter contract on their terms which rejects the whole of the original offer including the prevail terms

A
127
Q

Presumption that there is no legal intention to be bound is social arrangements is generally ebutted when family members club together in enter a race or competition

A
128
Q

Minors can enforce contract but they are not bound by them unless they ratify the contract when they turn 18

A
129
Q

Conveyance of land (the actual transfer of land made in order to implement the contract for sale) must be executed by deed

A
130
Q

For consideration to be valid, it must be sufficient but need not be adequate. The law requires there to be some value to the consideration (that is, sufficiency) but the law will not interfere if you have made a contractually bad bargain, that is, if the value of the consideration flowing from one party to the other is unequal (that is, not adequate).

A
131
Q

When may a contract be void or voidable?

A

Mistake (void)

Duress (voidable)

Undue influence (voidable)

Illegality or contravention of public policy (void)

Misrepresentation (voidable)

132
Q

Void = cannot be enforced

Voidable = can elect to enforce (or rescind)

A
133
Q

Title to goods can never pass under a void contract

A

FLK1 (8 decks)

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