contract law Flashcards
requirements for offer of contract
clear, certain and capable of acceptance; communicated to the offeree; demonstrate intention to create legal relations
examples of invitations to treat
a) goods on display
b) advertisements
c) auctions (unless sold without reserve)
d) tenders, except where lowest is to be accepted
when does an offer cease
when it is accepted or terminated
how can an offer be terminated
1) rejection or counter-offer
2) revocation when communicated to offeree
3) lapse after reasonable time
how may an offer be accepted
via unqualified expression of assent, by offeree or an authorised agent
who has the burden of proving intent to create legal relations
the person asserting existence of a contract
when does mental incapacity invalidate a contract
when the other party knew they were incapable of understanding the nature of the agreement
rules for good consideration
a) must not be past, unless this was requested by the promisor
b) must move from the promisee to the promisor
c) be sufficient
when can an existing obligation provide good consideration
a) a duty owed to a third party
b) going beyond an existing duty
c) a practical benefit is obtained
when is a promise to accept less good consideration
a) where it is a different thing, place or time of payment
b) part payment by a third party
c) promissory estoppel
when does a 3rd party have rights under a contract
a) the contract expressly provides for their benefit or
b) the term purports to confer a benefit on them
what is apparent authority
when an agent has created the appearance of authority to the 3rd party. where the 3rd party relies on this and it alters their position, the principal is bound.
how does a court classify terms of a contract
by looking at the parties’ intention
what is the remedy for breach of a condition
damages and termination
what is the remedy for breach of a warranty
damages
what is the remedy for breach of an innominate term
it depends on the severity of the breach
what terms are implied under the sale of goods act 1979?
a. goods will correspond with description
b. goods will be of satisfactory quality
c. goods will be fit for purpose
what terms are implied under sale of goods and services act 1986
work or service will be carried out with reasonable care and skill (innominate term)
what can’t be excluded in b-2-b contracts
- liability for negligence resulting in death or PI
- any other loss from negligence must pass reasonable test
- liability for breach of term can only be excluded if reasonable
what can’t be excluded in b-2-c contracts
- liability for negligence resulting in death or PI
- statutory terms relating to goods and services
- any exclusions are only effective if fair
what is actionable misrepresentation
an unambiguous false statement of fact made to the claimant which induces them to enter into.a contract with the statement-maker
what constitutes fraudulent misrepresentation
statement made:
(1) knowingly;
(2) without any belief in its truth; or
(3) recklessly
C must show they would have acted differently but for the misrep
what constitutes negligent misrepresentation
statement is made
(1) carelessly; or
(2) without reasonable grounds for believing in its truth
D must prove grounds for belief in truth
what constitutes innocent misrepresentation
where respresentor believed statement and had reasonable grounds for doing so
what damages are available for misrepresentation
fraudulent - all losses flowing directly from the transaction
negligent - all foreseeable losses
innocent - only in lieu of rescission
bars to rescission
- claimant affirms contract
- lapse of time
- impossibility
- 3rd party rights prevent it
what happens when a mistake is made
redners contract void is mistake is operative. mistake must occur at time of contracting.
what is common mistake?
mistake as to existence of subject matter, ownership of subject matter or quality.
what is mutual mistake
parties were mistaken as to the agreement. only voids contract where court finds it totally ambiguous.
what is unilateral mistake
where one party knows of mistake:
- as to term (cannot enforce mistakenly offered term)
- identity if material to contract
what is duress to the person
violence or threat of violence being a reason for entering into the agreement. renders contract voidable.
what is economic duress
pressure
a) whose practical effect compels or leaves no choice for the victim;
b) which is illegitimate; and
c) which is a significant inducing cause
renders contract voidable
what is undue influence
a) influence that goes beyond that which is regarded as acceptable; or
b) where one party takes unfair advantage of their position to influence the other
actual undue influence
proven on the facts
presumed undue influence
fiduciary relationship and a transaction that calls for explanation
when is restraint of trade allowed
1) in protection of a legitimate business interest; and
2) goes no further than reasonably necessary
what is the result of termination from breach
only future obligations are discharged
when is a contract frustrated
when an unforeseeable supervening event makes the contract impossible to perform or radically alters it. terminates all future performance. expenses may be recoverable.
when does the doctrine of performance not apply
1) divisible obligations
2) substantial performance
3) wrongful prevention
4) voluntary acceptance of part performance
what is expectation loss
the difference between the current position and the position that parties would have been in had contract been performed
what is reliance loss
where expectation is too speculative, reliance loss is used as expenses incurred because of reliance on the contract.
what is the remoteness rule
to be liable for a loss it must have been in reasonable contemplation of the party as a likely consequence of the breach, including any special circumstances that the breachor knows about
when is restitution a remedy
to prevent the unjust enrichment at the expense of another.
