Contract Law

Question 1

What are the 5 main elements of contract?

Answer 1

Intention to create legal relations 
Offer
Acceptance 
Consideration 
Certainty of terms

Question 2

What is an offer? And what makes it binding?

Answer 2

A written or oral statement. For an offer to be binding it must be clearly communicated

Question 3

What is the person who is making the offer and person to whom the offer is being made?

Answer 3

Person making offer - offeror

Person whom offer is being made - offeree

Question 4

What is counter offer?

Answer 4

Offeree puts a new condition on the acceptance. The offeree becomes the offeror

Question 5

What is acceptance?

Answer 5

An oral statement, written statement or act indicating acceptance. A contract is formed when the acceptor does something to indicated acceptance

Question 6

When is a letter of acceptance seen to be accepted

Answer 6

Offer is accepted when Letter of acceptance is posted

Question 7

What is consideration?

Answer 7

Something of value that passes from one party to another.
Consideration cannot be something in the past.
Offer has to be known before completing a task

Question 8

What is certainty of terms?

Answer 8

Terms of contract must be clear and precise. Cannot be in general terms (price, model)

Question 9

What is a capacity to contract?

Answer 9

A minor (under 18) is bound by a contract if the contract is for employment or necessities (food, medicine)

Question 10

What things relating to consent would make the contract voidable?

Answer 10

Real consent must exist between parties

Mistake, misrepresentation, duress, undue influence would make it voidable.

Question 11

What is legality?

Answer 11

A contract that is not within the law is not enforceable through the court

Question 12

What are the three terms of a contract?

Answer 12

Express terms
Condition
Warranties

Question 13

What are express terms?

Answer 13

Words that clearly define the item/s in the contract and are legally binding. (Make, model, price, colour)

Question 14

What are conditions of a contract?

Answer 14

Main terms of a contract. If a condition of the contract is breeched then the contract can be voidable

Question 15

What are warranties?

Answer 15

Not the main part of the contract. If warranty is breeched, you can claim damages for any loss, but the contract is not voidable

Question 16

What are exemption clauses?

Answer 16

Clauses exempting (freeing) the parties from liability in certain circumstances. (Dry cleaners have clauses on their tickets, exempting themselves from liability for damage on clothes)

Question 17

When are exemplary clauses enforceable?

Answer 17

When a reasonable person thought that such an exemption would be part of the contract

Question 18

What are standard form contracts? + 3 examples

Answer 18

Write in advance with details filled I’m later such as name of customer and price.
Used in: real estate, care sales, gym memberships

Question 19

What is the main remedy for a breech of contract ?

Answer 19

Damages

Question 20

What have been two changes in the law?

Answer 20

Banning of exit fees on home loans for contracts entered into after 1 July 2011

The naming of over-the-limit fees on credit cards

Question 21

What is a contract?

Answer 21

An agreement or promise between two individuals or groups that is intended to be legally binding and can be enforced by the law

Question 22

What is an intention to create legal relations?

Answer 22

A principle of law requiring the parties to intend to create obligations that are legally binding and enforceable

Question 23

What is an invitation to treat?

Answer 23

Not an offer, but an indication of a persons willingness to negotiate a contract

Question 24

What are implied terms?

Answer 24

Terms not written in the contract but assumed by the law to be present.

Question 25

What are 3 defences to breech of contract?

Answer 25

Consent was not freely given
There was no valid contact
You had not breeched the contract

Question 26

What is a contract?

Answer 26

An agreement between two individuals or groups that is intended to be legally binding and can be enforced by the law

Question 27

What are 2 Bodies/ methods for resolving disputes?

Answer 27

• Consumer affairs Victoria can organise conciliation between parties to reach an agreement (not binding)
• mag, supreme & county court can hear disputes relating to contracts