Contract Law Flashcards
Which contracts have to be in writing?
- Contracts of Guarantee
- Contracts to sell land
- Consumer Credit Agreements
Situations where offeror can’t revoke their offer
- collateral contract
- ## offer to form a unilateral contract: eg reward to find dog which you know about.
What is a counteroffer?
It is both a rejection that terminate the original offer and a new offers which the original offeror can accept or reject.
Can the offeror say that silence is an acceptance of the offer?
NO
What is the postal rule?
- Acceptance by post creates contract at moment of posting unless:
- letter wasn’t properly addressed and stamped.
- it wasn’t reasonable to accept by post
OR - the role hasn’t been excluded by the offeror, expressly or by implication.
ONLY APPLIES TO ACCEPTANCE
When will there be a rebuttable presumption parties did NOT intend a binding agreement?
When is there presumption it WILL be binding?
- Domestic family situations
- Social situations
In commercial and business agreements.
- there may be times when businesses don’t want their agreement to be binding eg they haven’t finished negotiating their contact.
- their agreement may just be a record of the terms they have agreed so far.
— in this situation must make it clear that this interim agreement is subject to contract
What is the difference between executed consideration and executors consideration?
Executory consideration has not been performed. Both can be the basis of a binding contract.
What are the rules about consideration?
- The promisee must give consideration in return.
- must be sufficient but need not be adequate
Performance of an existing duty
The normal rule is if you promise someone to do something you’ve already agreed to do then it isn’t enough to be sufficient consideration.
- exception person who owes the existing duty agrees to do something more.
- where the person who owns the existing duty confers some sort of practical benefit on the other party
- usual rule does not apply where the existing duty is owed to someone else
Part payment of a debt
- finding some new consideration will be needed.
- giving up a right to litigate is good consideration, eg giving up the right to litigate.
What does promissory estoppel do?
- It’s suspends the creditor’s original right it does not destroy them.
- Creditor’s original rights are reactivated when the reasons for the creditors promise not to enforce their rights no longer apply.
- will only work if it’s inequitable for creditor to pay the full amount.
What is a way to create a binding contract without consideration?
Make the contract in a deed. They do not need consideration.
Exclusion clauses
There are different rules depending on whether dealing with consumers or businesses.
If there is any uncertainly in the clause it’s going to interpreted against the party relying on it
What are 3 ways an exclusion term can be incorporated?
- by signature
- By notice, you were informed of the term before the contract is concluded
- By custom or course of dealing. Has to be both regular and consistent
** the more unusual or onerous the clause the greater the steps that need to be taken to bring it to the other party’s attention**
If they don’t take steps to point it out it won’t be part of the contact
What are the statutory rules on exclusion clauses?
-
Unfair Contact Terms Act 1977. - contacts between business
- some exclusions are void - any attempt to exclude the condition that the seller has good title to the goods is void
- others are only valid if reasonable
- applies to both exclusions of liability and limitations of liability.
was it reasonable to include the clause in the contact, at the time the contract was made
- Consumer Rights Act 2015 - contacts between businesses and consumers
- prohibited terms are unenforceable
- any attempt to limit implied statutory terms about the quality of goods or standard of service is prohibited.
- a term will be unfair if it causes an imbalance between the parties.
it’s the court who will decide if the terms are fair and reasonable
What are factors that can render a contact void?
- mistake - because there was never really a proper agreement with the parties so there can never be a contact
- Common mistake - both parties make the same mistake
- illegality
Means contract has NO legal force and can’t transfer title to property.
What is a voidable contract?
Remains in effect until rescinded by a party.
- until it’s rescinded the contract remains in effect.
- lack of capacity can make a contact voidable
- as can duress, undue influence and misrepresentation
duress
One person applies illegitimate pressure to the other to enter into a contract.
undue influence
One person abusing their influence over the other.
- based on the personal relationships between the parties
- no need for bad faith
What is a mutual mistake?
What is a unilateral mistake?
mutual mistake Where the parties are at cross purposes, they both think they are contracting about different things.
unilateral mistake
- One party is mistaken
- the other party is aware or should be aware of the mistake. Eg price too good to be true
Mistake doesn’t apply where it’s about the quality of the subject matter. So there might still be a contact
When will undue influence be presumed?
- if there’s a relationship of trust between the parties and one party enters into a transaction that is so unfavourable to them that it calls for an explanation.
- it’s then up to other party to prove that they didn’t exert undue influence on the other party
What does ‘put on inquiry mean’
- 3rd party undue influence
- Wife will have to get independent legal advice before signing for loan for husband’s business
