Contract Law Flashcards
Invitation to treat
- Adverts (unless it is an unilateral offer)
- Auctions (unless it is an auction without reserve, highest bid)
- Display of goods for sale
- Invitation to tender (unless it is an unilateral offer, *the highest bidder, specific number of parties with clear conditions it must be consider)
- Statements of price
Rules for acceptance by E-MAIL or PHONE
E MAIL : - Acceptance will take place when it reaches the offeror’s server.
- If e mail reached in the office hours (9-5) -> same day, if outside of the office hours -> next business day.
PHONE : - Acceptance will take place when the offeror hears the acceptance over the phone.
- if line breaks or is so cracky so the offeror did not understand, there is no acceptance.
Postal Rule
- Acceptance -> when the letter is properly posted, not when and where it reaches the offeror.
- The postal rule cannot be used where:
- It is unreasonable to use the post to accept an offer.
- The use of post has been explicitly excluded by the offeror.
Williams v Roffrey
- Practical benefit rule.
- If one party:
i. Provides a practical benefit to another,
ii. By completing a pre-existing obligation on time,
iii. At the other party’s promise to pay more in return,
iv. Resulting in that other party gaining a benefit or avoiding a penalty (a loss),
this practical benefit amaounts to consideration and must be paid for in addition to any payment owed under the contract.
Classification of terms
Conditions : root of contract
Warranty : less important term than a condition
Innominate term : not a condition or warranty, but if breach substantially deprives benefit of contract =condition
Sale of Goods Act (SoGA) 1979 - implied terms
- They are all CONDITIONS.
s12(1) - the seller has to right to sell goods.
s13(1) - correspondence with the description
s14(2) - satisfactory quality
s14(3) - fitness for a particular purpose
s15(2) - sale by sample
s15(A) - if there is a breach of the condition but there is “so slight” that it would be unreasonable to treat the breach as a condition (and reject the goods), it is not a breach of condition but it is a breach of warranty.
Supply of Goods and Services Act1982 - implied terms
- They are all INNOMINATE TERM, so apply Hong Kong Fir test.
s13 - care and skill
s14 - time of performance
s15 - consideration
Consumer Rights Act 2015 - implied terms
- No need to classify them because they have special remedies as they are consumer rights.
- Sale of goods contract (1-Reject the goods and get a full refund within 30 days for non-perishable goods, reasonable time for perishable goods. 2-Have the goods repaired or replaced. 3-Price reduction or partial refund for anything already paid, which is final right. Note: They can always claim recovering damages for any loss suffered.)
s9 - satisfactory quality
s10 - fitness for particular purpose
s11 - correspondence with description - Sale of digital content (1-Repair or replacement. 2-Price reduction 3-Right to refund, within 14 days.)
s34 - digital content to be of satisfactory quality
s35 - digital content to be fit for a particular purpose
s36 - digital content to be as described - Sale of services (1-Right to repeat performance. 2-Price reduction, within 14 days. 3-Right to refund.)
s49 - care and skill
s51 - consideration
s52 - time of performance
Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd
- To see whether it is a condition or warranty.
ASK : Does the breach of the term deprive the innocent party of substantially the benefit of the contract?
Unfair Contract Terms Act 1977 (UCTA) (for B2B contracts)
- strict liability.
- UCTA applies to exemption clauses limiting liability for DEATH + PI or ss12,13,14, 15 SoGA 1979 only.
- It does not apply to an exemption clause for any other breach. (e.g. negligence causing financial loss.)
- UCTA doesn’t apply to consumer contracts. All the terms implied in a C2B contract by the CRA CANNOT be excluded or limited in any way.
Dunlop v Selfridge
- Privity of contract (privity general rule)
- Dunlop, Dew Co, Selfridge (tyre manufacturing)
- Dunlop was not a party to the contract between Selfridge and Dew&Co. Only Dew&Co can sue to Selfridge.
Exceptions to privity general rule
1 - Agency
2 - Collateral contract : it may be formed between one party of a contract an a third party outside of that contract where the third party has given a promise on which the party relied and entered into the contract with the other party, and for which the third party has received some sort of benefit.
3 - Assign
4 - Contracts (Right of Third Parties) Act 1999 :
- It can be expressly exluded.
- Where: 1. the contract expressly provide that, 2. purports to “confer a benefit” on the third party or the parties intended the term to be enforceable by the third party.
*** CRTPA may apply to exemption clause, meaning a third party can rely on an exemption clause.
Pinnel’s case
There was a debt to be repaid. The debtor paid less than the amount owed but paid in advance of the due debt. It is a “new element” and a valid consideration.
Central London Property Trust v High Trees House - 1947
- Promissory estoppel
Cavendish Square Holdings case
- Test for “Penalty Rule”
1. You must have liquidated damages clause that is triggered.
2. There is no justification fot the liquidated damages clasue (legitimate interests).
3. The clause is “excessive” or “unconscionable” (disproportionate to the commercial interests).
