Contract law Flashcards
Acceptance
Unqualified and unconditional assent to all the terms of the offer.
Can be oral, written or by conduct
Mode of acceptance can be stipulated by offeror. However if he merely requests a mode then offeree is not limited to that mode
Communication of acceptance
Acceptance is not effective until it is communicated to the offeror.
Saadat based in london give Noor offer.
Noor in Amsterdam accepted the offer and replied to saadat in london.
Contract is made in london because acceptance is not effective until it is communicated
Exception
If a fax, telephone msg is received during normal business hours that is when it is communicated even though it might not be read until later.
If a fax, tel msg, is rec outside normal business hours, it is deemed to be communicated when the business next opens
Silence does not means acceptance
Silence is not acceptance
Nephew had horse
Uncle said to him that give me this horse in 30000
Nephew didn’t reply
Nephew give auctioneer to sell his horse and he did
In this case uncle cannot sue actioneer
As offeror didnt make acceptance/offer.
The postal rule of acceptance
Acceptance is complete as soon as the letter is posted.
Acceptor bande ne post kardiya toh uss waqt ko communication hojayegi. Chahe woh naa pohnche yaa woh naa read kare
Postal rule applies only if:
Letter is properly stamped, address and posted
Post is a reasonable method of communication
Consideration
An act or forbearance on the part of one party to a contract as the price of the promise made to him by the other part to the contract
Executory consideration
Abhi consideration nahi pay karna.
Abhi contract execute nahi hua. Jab execute hoga tab payment (consideration ) pay hoga
Eg. Cash on delivery
Sufficient consideration
Consideration need to be sufficient not need to be adequate
Sufficient means must be some monetary value of consideration
Must be capable in law of amounting to consideration
Sufficient not (basically not binding)
Not sufficient if in accordance with a natural duty already owed (child complain)
With a legal duty already owed
With a contractual duty already owed (ship me aage jaane ke paise)
Exceptions to this rule
If existing contractual or statutory duty is exceeded, there is sufficient consideration
E.g: police already provided to person in day time. If I ask for night as well. So it is over and above the statutory requirement.
If over and above contractual duty (e.g one person said i wll pay you 10k more if you complete on 4th as deadline, so he saved his penalty and the labour was benefitted also)
Executed and executoru
Executed: I paid for the car (consideration executed)
Executory: I haven’t delivered car (Executory consideration)
Privity of contract
Parties to the contract
-acquire rights and obligations under it
-can sue and be sued on it
Part payment problem (pinnels case)
If 500 ka contract tha. B paid 400 and A accepts it. A can still sue for 100.
Exceptions of pinnel case (4)
-where part payment is made by 3rd party
-composition with creditors (the creditors all agree to accept a sum which is less than they are owed)
-accord and satisfaction means case to case) both parties agree freely for part payment
Satisfaction (understanding of each case)
Promissory estoppel
Based on the principles of fairness and justice. E.g corona times
Example of promissory estoppel
Flat A rented to B.
B sub let to others.
War years me full rent nh le sakte even war khtam hojaye uske baad bhi.
Afterwards you can claim full for the further years
Fairness and justice to be seen in every situation.
Principle of estoppel (conditions)
Must be existing contract bet the parties
Claimant must voluntarily waive their rights under the contract.
There must be an intention that the defendants should rely on the waiver.
The defendant must alter their legal postion because of the waiver
Limitations of doctrine of estoppel
It is sheild not a sword (jisko problem ayi hai wohi faida uthaye)
It may only have suspensory effect (eg corona or ww)
The party seeking to use it as an equitable defence must also have acted fairly in their dealings with the claimants
Privity of contract (exceptions)
-maybe 3rd person ho who is not a party to a contract to enforce it so long as the contract was for his benefit and he was expressly identified by name or description
E.g uncle shaadi krlo
A contract between parties maybe accompanied by a collateral contact between one of the parties and third person relating to the subject matter (A ne B k sath contract kiya k mujhe building bana kar do, B ne C ko dediya contract k banao. So in this situation C is also a privity to the contract
Land law
Restrictive covenants run with the land to which they relate
i.e future owner will be subject to restrictions made in previous contracts
Insurance law
Allows a third party to take benefit of a contract of insurance
Other examples
Trust law allows beneficiary to enforece a trust
Agency law allows an agent to make contract between his principal and a third party
Dealer of company selling goods
So basically dealer is agent
Company and customer are parties
Intention to create a legal relations
Both parties must intend to enter into a legal relationship.
If intention nahi clear ho payi then law presumes the intentions of the parties based on the type of agreement
Domestic and social agreement
No legal relationship
Binding in honour only
Apas me kardiya not legally bound karne k liye.
Letter of comfort
-no legal effect as parent company does not have a obligations to fulfill
-international contracts letter is used to assure a contracting party that a parent will provide it’s subsidiary with the necessary resources to fulfill the contract
Representation
Something that is said by offeror in order to induce the offeree to enter into the contract. It may or may not become a term of that contract
Remedies to representation
-If the representation becomes a term of the contract, the innocent party has remedies for breach of the term as well as for misinterpretation
-if the reps, does not becomes a term of the contract, the innocent party will have remedies only for misinterpretation which are based on equitable remedies
Implied and Express terms
Express terms override the implied
However if law set a minimum wages of 15usd and I expressed 12usd then although 15 is implied but here it overrides as set by law
So implied is set by: law (acts), customs
Types of terms
Conditions
Warranties
Innominate terms
The distinction between the types of term is important because it determines the remedies that may be available in the event of a breach.
Conditions
Root of contract
-breach can result in damages or discharge or both.
Discharge means contract khtam kar k claim damages
Warranties
Less important term, incidental to the main purpose of the contract
-breach may result in damages only
Innominate/indeterminate term
Remedy depends on the effect of the breach.
-if trivial: damages only
-if serious: damages,discharge or both
Exclusion clause
Term that seeks to exclude or limit a party’s liability for breach of contract
E.g if you open fone then warranty ends
Rules of exclusion clause:
Must be incorporated into contract
Wording must cover the loss (clear likha hona chahye)
Exclusion clause can be incorporated by
Signature
Notice
Previous dealings
Signature
Clause incorporated by signature even if the signatory did not read or understand the document
But does not incorporate if the effect of the term is misrepresented
Notice
Clause must be incorporated by notice and reasonble steps must he taken to bring it to the attention of the other party at the time the contact was made
Previous dealings
There must have been a consistent course of dealings between the parties
Discharge of contract
By performance - both parties perform their obligations
By frustration - after contract is made it becomes impossible to perform
By breach of contract -
Breach of contract
When one parties of the agreement fails to comply, either completely or satisfactorily with their obligations under it
Types of breach
Actual breach - occurs on the day of performance
Anticipatory breach - before due date
Anticipatory breach may be either express or implied
Effect of anticipatory breach (condition)
Not automatically bring the contract to an end.
The innocent has two options:
- Treat the contract as discharge and bring an action for damages immediately without waiting for contractual date of performance
- Elect to treat as still valid. Complete his side of bargain and then sue for payment by the other side
-or wait till the other party changes his mind
Contract
Is an agreement supported by consideration with the intention of legal relation.
Contract
Is an agreement supported by consideration with the intention of legal relation.
Agreement
Offer and acceptance is called agreement
Consideration is fundamental for
Simple/parol contract except specialty
Specialty contract
Made under seal. Stamped properly and addressed as deed
In order to get full compensation for anticipatory breach
Injured party must be in the position to complete their obligation at the date contract was due to start
Acceptance does not need to be communicated in
Unilateral contract
