Contract Law Flashcards
Outline extent which offshore centres base contact law
Based on that of England & Wales / extent varies between offshore jurisdictions
I.e - JSY contract law refers to both Norman Law & English Cases
Define contract
An agreement between parties that is made with intention for it to be legally binding & supported by consideration
Made in any form/ usually in writing
Outline essential elements to form a valid contract (agreement)
Agreement:
Offer - definite expression of willingness to be legally bound to specific terms without further negotiations
Offer made in any form (written or oral) & must be communicated by offerer & must be open at time accepted (not ran out of date)
Offers must be distinguishable from supply of info intended to enlighten other party
Offer is specific / value
Acceptance - unconditional agreement to terms of offer / accepted before terminated / must be communicated to be effective (exemptions to rule)
Outline an invitation to treat
Invitation to make another offer / not accepted to form a contract
Adverts/ goods on display consisted to he invitations rather than offers
PHARMACEUTICAL SOCIETY v BOOTS CASH CHEMISTS
- law of sale of pharmaceuticals must be provided under supervision of qualified pharmacist
- boots displayed them on shop shelf with price tag/ customers paid at till where qualified pharmacist present
- Society claimed sale took place where customer placed goods in basket & not under supervision
- court held display of goods was invitation to treat & no not an offer
- customer made offer at till/ pharmacist accept or reject
- advertisement of selling price in response to requests of info not an offer
Outline ways to terminate an offer
Rejection
Counter offer terminates original
Revocation/ revoke offer communicated
Lapse of time/ reasonable for open offers
Death
Outline essential elements of a contact (consideration)
Price to pay for a promise / both parties lose & gain something
Courts don’t enforce bare promise / only a bargain / therefore must have legal worth
Must be provided by both parties
Currie v Misa “some right, interest, profit or benefit accruing to one party or some loss or responsibility given suffered to undertaken by another”
Outline rules of consideration
-must be sufficient (legal worth)
(CHAPPEL & CO LTD V NESTLE)
- need not be adequate (not equal/ court doesn’t look into bad bargain)
- cannot be past consideration
- cannot be performance of existing duty
(STILK V MYRICK)
-must be legal acts
Outline the cases of consideration
CHAPPEL & CO LTD V NESTLE
- nestle promised to give away copy of record to people who sent 3 wrappers & postal delivery
- royalty required on record to CHAPPEL who owned copyright
- nestle argued wrappers ordinary selling price / CHAPPEL argued they were worthless when received and couldn’t amount to consideration
- judge deemed irrelevant & overturned decision / contracting party can choose consideration
STILK V MYRICK
-during voyage two men deserted / myrick entered agreement with remaining crew to pay bonus
-when voyage finished captain refused payment / promise not enforceable due to performance of excising duty under contract
Outline Case of an offer
Carlill v Carbolic Smoke Ball
Advert of medicine ball “£100 reward to any person gets flu after using ball three times a day for two weeks according to directions”
Carlill claimed to catch flu after using ball
Company refused to pay arguing no legally binding contract in place / magazine not sufficient advert / court established wording of advert had intention to create legal relations
Case illustrated:
- all essential elements in place
- advert consisted offer / not named person
- acceptance of offer was performance of condition / acceptance communicated / terms followed
- adequate consideration was taking medicine as directions
*offers Can be made worldwide
Outline the essential elements of a contract (legal intentions)
Legal intentions
-to enter the contract both parties must have intended to be legally bound to the arrangement
-need not be explicit / may be implied from circumstances
Express/ commercial arrangements
(I.e divorce) = legally binding
Domestic/ social arrangements (family)
= not legally binding
Outline essential elements of a contract (capacity & legality)
Capacity
Parties must have legal capacity to enter contract to be enforceable
Unless; disqualified director, minor, mentally incapacitated, bankrupt
Legality
Contracts deemed illegal cannot be enforced
Outline rules for performance of a contract
General rule contracts must be performed in their entirety
CUTTER V POWELL
(Cutter contracted work on voyage / died during / worked part of his contract / widow argued she was entitled to the amount he worked (half) / found in instrument he failed to meet obligations as he must have competed entirely / no compensation for part performance)
Rules;
- prevention of performance by another party
- acceptance of partial performance by both parties
- substantial performance of contract & hold retainer for incomplete work
- servance (don’t enter initially)
Outline breach of conditions of a contract
Conditions of contract should be fulfilled completely/ in event that contracted conditions isn’t met by either party a beach occurs
Innocent party can sue other party for damages remedy
Limitation Act 1980 states “an action founded in simple contact shall not be brought after expiration of 6 years from date which cause of action occurred”
If breach fundamental it’s possible for aggrieved party to terminate contract
Outline the remedies for breach of contract
Damages
-standard common law remedy / monetary compensation for loss
Where damages provide insufficient compensation the court can award equitable remedies
Specific performance - unique/ rare assets
Injunction - judicial order to restrain person from doing something
Mareva injunction - asset freezing order prevents someone disposing/ transferring assets
Recession - revocation of contract to resolve parties position before entering the contract
Quantum merit - as much as it’s worth/ fairness
