Contract law

Question 1

Explain Promissory Estoppel (or equitable estoppel)

Answer 1

Provides a means of enforcing a gratuitous promise even though the promisee has provided no consideration.

The following limitations apply:

1. There must be an existing legal relationship
2. there must be a clear an unequivocal promise
3. reliance: change of position
4. inequitable to break the promise
5. Suspension or extinction (suspens legal rights, rather than extinguish until circumstances change. The doctrine can extinguish existing rights partially or completely if and until until promisee is able to return to his original position. )

Question 2

Describe the contra proferentem rule

Answer 2

Where there is ambiguity or doubt regarding the meaning of an exclusion clause, the courts will interpret the exclusion clause adversely against the party that inserted it into the contract

Question 3

Describe the repugnance rule

Answer 3

if the exclusion clause is in direct contradiction to the main purpose of the contract, it is repugnant to it. Where repugnance is present, the exclusion clause is liable to be struck out.

Question 4

Describe the four corners rule

Answer 4

An exclusion clause can only apply where a contracting party is acting within the four corners of the contract. The exclusion clause may be nullified if the party steps beyond the terms of the contract.

Question 5

When does the Unfair Contract Terms Act (UCTA) apply?

Answer 5

UCTA applies to contract terms and to notices which are non-contractual, and which purport to exclude or restrict liability in tort. The scope is restricted. Apart from s.6 (implied terms in sales of goods and hire purchase agreements) it is concerned with terms which purport to exclude business liability by commercial concerns, although terms within consumer contracts are governed by the Consumer Rights Act. Private persons may hover restrict liability as much as they want.

The UCTA does not apply to:

1. contracts for insurance,
2. land, patents or
3. company formation.

Question 6

What is a misrepresentation?

Answer 6

Untrue factual statement of material facts, made by one party tot he other either before or at time of making of the contract that does not become a term, which induced the other to enter the contract. The effect of an actionable misrepresentation is to render the contract voidable, giving the innocent party the right to rescind the contract or to claim damages.

Question 7

What are Pecuniary and Non-Pecuniary Damages?

Answer 7

Within the category of compensatory damages, sometimes called consequential damages, there are two subcategories: pecuniary damages and non-pecuniary damages. Pecuniary simply means of or relating to money, so these damages are those where the monetary value is easily discernible.

Pecuniary damages are damages that can be definitively ascertained and carry a quantifiable monetary value. Example include medical bills, property replacement or repairs, loss of wages or any other loss that can be easily quantifiable.

Non-pecuniary damages are damages that do not have a discernible, quantifiable monetary value. These are things like pain and suffering, emotional harm, psychological harm, loss of future wages, disfigurement, loss of quality of life and basically any damage incurred that is a foreseeable consequence of the harm that is not pecuniary