contract law

Question 1

requirements for offer of contract

Answer 1

clear, certain and capable of acceptance; communicated to the offeree; demonstrate intention to create legal relations

Question 2

examples of invitations to treat

Answer 2

a) goods on display
b) advertisements
c) auctions (unless sold without reserve)
d) tenders, except where lowest is to be accepted

Question 3

when does an offer cease

Answer 3

when it is accepted or terminated

Question 4

how can an offer be terminated

Answer 4

1) rejection or counter-offer
2) revocation when communicated to offeree
3) lapse after reasonable time

Question 5

how may an offer be accepted

Answer 5

via unqualified expression of assent, by offeree or an authorised agent

Question 6

who has the burden of proving intent to create legal relations

Answer 6

the person asserting existence of a contract

Question 7

when does mental incapacity invalidate a contract

Answer 7

when the other party knew they were incapable of understanding the nature of the agreement

Question 8

rules for good consideration

Answer 8

a) must not be past, unless this was requested by the promisor
b) must move from the promisee to the promisor
c) be sufficient

Question 9

when can an existing obligation provide good consideration

Answer 9

a) a duty owed to a third party
b) going beyond an existing duty
c) a practical benefit is obtained

Question 10

when is a promise to accept less good consideration

Answer 10

a) where it is a different thing, place or time of payment
b) part payment by a third party
c) promissory estoppel

Question 11

when does a 3rd party have rights under a contract

Answer 11

a) the contract expressly provides for their benefit or
b) the term purports to confer a benefit on them

Question 12

what is apparent authority

Answer 12

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.

Question 13

how does a court classify terms of a contract

Answer 13

by looking at the parties’ intention

Question 14

what is the remedy for breach of a condition

Answer 14

damages and termination

Question 15

what is the remedy for breach of a warranty

Answer 15

damages

Question 16

what is the remedy for breach of an innominate term

Answer 16

it depends on the severity of the breach

Question 17

what terms are implied under the sale of goods act 1979?

Answer 17

a. goods will correspond with description
b. goods will be of satisfactory quality
c. goods will be fit for purpose

Question 18

what terms are implied under sale of goods and services act 1986

Answer 18

work or service will be carried out with reasonable care and skill (innominate term)

Question 19

what can’t be excluded in b-2-b contracts

Answer 19

• 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

Question 20

what can’t be excluded in b-2-c contracts

Answer 20

• liability for negligence resulting in death or PI
• statutory terms relating to goods and services
• any exclusions are only effective if fair

Question 21

what is actionable misrepresentation

Answer 21

an unambiguous false statement of fact made to the claimant which induces them to enter into.a contract with the statement-maker

Question 21

what constitutes fraudulent misrepresentation

Answer 21

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

Question 22

what constitutes negligent misrepresentation

Answer 22

statement is made
(1) carelessly; or
(2) without reasonable grounds for believing in its truth
D must prove grounds for belief in truth

Question 23

what constitutes innocent misrepresentation

Answer 23

where respresentor believed statement and had reasonable grounds for doing so

Question 24

what damages are available for misrepresentation

Answer 24

fraudulent - all losses flowing directly from the transaction
negligent - all foreseeable losses
innocent - only in lieu of rescission

Question 25

bars to rescission

Answer 25

1. claimant affirms contract
2. lapse of time
3. impossibility
4. 3rd party rights prevent it

Question 26

what happens when a mistake is made

Answer 26

redners contract void is mistake is operative. mistake must occur at time of contracting.

Question 27

what is common mistake?

Answer 27

mistake as to existence of subject matter, ownership of subject matter or quality.

Question 28

what is mutual mistake

Answer 28

parties were mistaken as to the agreement. only voids contract where court finds it totally ambiguous.

Question 29

what is unilateral mistake

Answer 29

where one party knows of mistake:
- as to term (cannot enforce mistakenly offered term)
- identity if material to contract

Question 30

what is duress to the person

Answer 30

violence or threat of violence being a reason for entering into the agreement. renders contract voidable.

Question 31

what is economic duress

Answer 31

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

Question 32

what is undue influence

Answer 32

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

Question 33

actual undue influence

Answer 33

proven on the facts

Question 34

presumed undue influence

Answer 34

fiduciary relationship and a transaction that calls for explanation

Question 35

when is restraint of trade allowed

Answer 35

1) in protection of a legitimate business interest; and
2) goes no further than reasonably necessary

Question 36

what is the result of termination from breach

Answer 36

only future obligations are discharged

Question 37

when is a contract frustrated

Answer 37

when an unforeseeable supervening event makes the contract impossible to perform or radically alters it. terminates all future performance. expenses may be recoverable.

Question 38

when does the doctrine of performance not apply

Answer 38

1) divisible obligations
2) substantial performance
3) wrongful prevention
4) voluntary acceptance of part performance

Question 39

what is expectation loss

Answer 39

the difference between the current position and the position that parties would have been in had contract been performed

Question 40

what is reliance loss

Answer 40

where expectation is too speculative, reliance loss is used as expenses incurred because of reliance on the contract.

Question 41

what is the remoteness rule

Answer 41

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

Question 42

when is restitution a remedy

Answer 42

to prevent the unjust enrichment at the expense of another.