Contract Law Flashcards
Tenders
If a tender says that it will ‘consider all confirming tenders’, it would be in breach, if it then disregarded one, for any reason, as long as the individual complied [Example the case of Blackpool 1990 1 WLR 1195, in which they delivered their tender on time, but the post-box wasn’t emptied. As they complied, the unilateral contract was broken when they weren’t considered].
Past Consideration
‘Past consideration is not good consideration’ is not an absolute rule. These is an exception which states that:
* The past act was done at the promisor’s request.
* There was a mutual understanding that there would be some form of compensation.
* Had the promise been made in advance, it would be contractually bound (i.e. intention to create legal relations).
Promissory Estoppel
- If you have made a promise not to enforce legal rights.
- Someone relied on that promise, even though they have not provided anything in return.
- If you try to enforce your legal rights you will be ‘estopped’ from doing so.
Minors in Contract
The parties are not bound by contracts they have entered; however, the other party is bound and can be sued.
Contracts for “Necessities” (supply of necessary goods and services, or contracts of services for the minor’s benefit) will bind the minor.
Previous Course of Dealings
Previous Consistent Course of Dealing: Regular dealings in the past, that were all on exactly the same terms and conditions.
Terms implied by Statute
- Sale of Goods Act 1979 – goods with correspond with description, satisfactory quality etc.
- Supply of Goods and Services Act 1982 – Goods will correspond with description, satisfactory quality, fit for purpose, reasonable care and skill.
- Consumer Rights Act 2015 – Satisfactory quality, fit for purpose, correspond with description, reasonable care and skill, reasonable time etc.
- If the goods do not conform to the contract, the consumer has the short-term right to full refund (30-days), right to repair or replacement, or a price reduction.
Exemption Clauses
Construction: Was it intended to exclude, or otherwise limit, liability for the particular breach and loss that has occurred.
The clause will always be construed against the person seeking to rely on it (if ambiguous).
Unfair Contract Terms Act 1977
- Prevents the defendant from excluding/restricting their liability by reference to death/personal injury caused by negligence.
- A “reasonableness” test is implemented with regards to the exemption clause, with respect to loss or damage caused by negligence; breach of statutory implied terms; breach of an express term contained in the standard written terms.
Consumer Rights Act 2015
- Liability for goods to be of a satisfactory quality, fit for particular purpose and to be as described, cannot be excluded or restricted.
- Reasonable care and skill can also not be excluded in service contracts.
Restitution
To stop a party being unjustly enriched at the expense of the other party:
* i.e. Recovery of advance payment where total failure of consideration; Reasonable sum payable if wrongfully prevented from completing or for work undertaken where a contract is never formed.
* Lost opportunity – For example, says in a contract can’t go elsewhere and then does.
Frustration of Contract (Test)
- Make performance of the contract impossible, or radically different (i.e. government intervention; unavailability of a specific person crucial to the contract; illegality; destruction of the subject matter etc).
- Be something beyond the ordinary risks that the parties can be treated as having taken on board when entering into their contract and
- Be something that was beyond the control of every party.
The future performance of the contract is terminated automatically as a matter of law, and both parties are released from all future obligations.
Law Reform (Frustrated Contracts) Act 1943
- Money paid before the event can be recovered.
- Money that should have been paid before the event, need not be paid.
- Expenses incurred by the payee can be recovered out of the total sums paid/payable before the event.
Discharge by Performance
If one party has to pay only after the other has performed their obligations under the contract, then if performance is not precise and exact, the payer does not have to pay.
The exceptions are:
a. Divisible Obligations – If the parties have agreed distinct parts/stages of the contract.
b. Substantial Performance – If someone has completed the majority, but a slight defect, they will be entitled to the full cost minus the price of putting right the defect.
c. Wrongful Prevention – If a party is wrongfully prevented from completing their contractual obligations, they will be entitled to either damages or a reasonable sum in restitution for what has already been done.
d. Voluntary acceptance of past-performance – If part-performance is accepted, then the supplier is entitled to a reasonable sum for what they have done.
Misrepresentation
“An untrue statement of fact made by one party to a contract, by words or conduct, to the other contracting party, which induced the other to enter into the contract”.
Recision
If a party has been misled into a contract and does not want to affirm it, one option is to get out of the contract. This is rescission. It is also known as “setting aside” the contract. This is an equitable remedy and therefore, is done so at the discretion of the court. Rescission can be barred if:
a. There is affirmation.
b. Undue delay
c. Innocent purchaser has acquired an interest in the subject matter.
d. Impossible substantially to restore goods or property.
Damages – Extend to all losses from entering into the contract.
