Contract Law

Question 0

Give an example of a case that shows the contracts are legally binding.

Answer 0

L’Estrange v Gracoub (1934)

Question 1

What form do contracts take?

Answer 1

No specific form, except for transfer of property, consumer credit agreements (buy now, don’t pay until 2018), cheques etc.

Question 2

What are the 4 essentials of a contract?

Answer 2

Intention to be legally bound, clear terms, consideration and agreement.

Question 3

What are the 2 elements of agreement?

Answer 3

Offer and acceptance.

Question 4

What is the difference between an offer and an invitation to treat?

Answer 4

An offer is a proposal of a contract with the clear intention of legal bind rather than a vaguer invitation for offers.

Question 5

Give 3 examples of cases outlining invitation to treat and explain.

Answer 5

Pharmaceutical society of GB v Boots Cash Chemists (1953), Fisher v Bell (1961) and Partridge v Crittenden (1965).

Question 6

What are the 3 main rules relating to acceptance?

Answer 6

The offeree must accept all terms of the offer, the must accept in the method stipulated in the offer and the acceptance must be expressed in words or conduct.

Question 7

What case shows that silence does nt constitute acceptance?

Answer 7

Felthouse v Bindley (1862).

Question 8

What is the postal rule?

Answer 8

When a contract is accepted by post, the contract is valid from when the acceptance is posted.

Question 9

Explain the difference between bilateral and unilateral contracts and give an example of a unilateral contract.

Answer 9

Unilateral contracts legally bind only one party, Carlill v Carbolic Smoke Ball Co. (1893).

Question 10

What does the law say about intention to be legally bound in social/domestic cases?

Answer 10

It assumes they are not intended to be legally binding.

Question 11

Give 2 examples of when social/domestic cases where the issue of intent to be legally bound has arisen.

Answer 11

Balfour v Balfour (1919) (unsuccessful rebuttal) Merrit v Merrit (1970) (successful)

Question 12

What does consideration mean?

Answer 12

That something of value must be exchanged by both parties. Also, the contract must be fully performed to pay.

Question 13

Explain certainty of terms and give a case which shows that this is essential.

Answer 13

The contract must be clear, judges will not rewrite cases which aren’t. Loftus v Robertd (1902).

Question 14

Explain the privity of contracts.

Answer 14

3rd parties cannot claim on contracts.

Question 15

In what consequences can third parties claim on contracts and under what act?

Answer 15

The Rights of Third Parties Act 1999 states that they can claim if they are expressly identified in the contract and the contract specifically says how they will benefit and that they can sue if they don’t.

Question 16

What is an example that illustrates the rights of third parties?

Answer 16

Tweddle v Atkinson (1861).

Question 17

What does the law say about unfair terms in contracts? Give an example.

Answer 17

They aren’t legally binding e.g long winded terms and conditions.

Question 18

What are the three states of a contract and what do they mean?

Answer 18

Valid - a standard functioning contract, voidable - following a breach, the injured party is no longer bound and void- null, the contract never existed.

Question 19

What happens in the case of a void contract?

Answer 19

Rescission.

Question 20

What is a ‘mere puff’?

Answer 20

An exaggerated statement of no legal consequence e.g. “Red Bull gives you wings”.

Question 21

What is a representation?

Answer 21

A statement made about the contract.

Question 22

What is a term?

Answer 22

A legally binding element of the contract.

Question 23

What constitutes misrepresentation?

Answer 23

The statement must be untrue, it must be one of fact and it must induce the injured party to have entered into the contract.

Question 24

What are the 3 types of representation and what are their remedies?

Answer 24

Fraudulent - rescission and/or damages, negligent - rescission and/or damages, innocent - either rescission OR damages.

Question 25

What is the difference between express and implied terms?

Answer 25

Express ones are stated in the contract where as implied can be taken to be true based on other grounds, such as previous statutes.

Question 26

What are the 3 types of express terms in a contract?

Answer 26

Conditions, warranties and innominate terms.

Question 27

What are conditions?

Answer 27

The major terms of a contract. A breach would result in rescission and/or damages.

Question 28

What are warranties?

Answer 28

Minor, less important terms of a contract, a breach means damages only.

Question 29

What are innominate terms?

Answer 29

Terms which are not clearly conditions or warranties, a breach can mean varying compensation (damages and or rescission) depending on seriousness.

Question 30

Give an example of a contract with an innominate term, what was the outcome?

Answer 30

Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd (1962)

Question 31

What case illustrates an implied term?

Answer 31

Liverpool City Council v Irwin (1977)

Question 32

What are the 4 things that can terminate a contract?

Answer 32

Performance, agreement, frustration, breach.

Question 33

Explain performance in relation to contract termination. What cases relate to this.

Answer 33

The contract must be performed in full. Cutter v Powell (1795). This is except if the parties agree to transfer a partial benefit that is deemed reasonable. Hoeing v Isaacs (1952).

Question 34

What are the time limits for contract cases?

Answer 34

The claim must be brought within 6 years of the breach. This can be up to 12 years for cases involving land.