Contract Law

Question 1

Definition of a contract

Answer 1

A set of promises that the law can enforce

Question 2

The Schematic approach

Answer 2

offer, acceptance, intention to create legal restrictions, consideration, genuine consent, capacity, legality

Question 3

The first example of how an offer can be made to the world

Answer 3

Carlill v Carbolic smoke company - flue from ball

Question 4

Invitation to treat

Answer 4

a situation where someone is inviting you to negotiate - no offer is made yet

Question 5

What is an offer

Answer 5

offering you a price

Question 6

What is puffing

Answer 6

a puff is generally an expression or exaggeration made by a saleperson that concerns the quality of the product - presents opinion rather than fact

Question 7

Who may withdraw the offer?

Answer 7

the oferror may, however this revocation of an offer must be communicated to the offeree

Question 8

How to prevent the revocation of offers?

Answer 8

having an options - side agreement - offeror agrees to keep option open for a period of time - give good value for them to hold good

Question 9

What is an acceptance?

Answer 9

n indication that a person agrees to be bound by the particular terms of the offer

Question 10

What is the postal rule?

Answer 10

This is an exception to the general rules on acceptance

Question 11

Rejection offer?

Answer 11

Rejection of the offer puts an end to it. Once rejected, the offer can not later be accepted if the offeree changes their mind. It would need to be renewed by the offeror

Question 12

What is a counter offer?

Answer 12

occurs when precise terms are not accepted but the oferee still wants to negotiate

Question 13

Hyde v Wench

Answer 13

vendor offers to sell farm for 1000 pounds purchaser offered 900 (counter offer) vendor rejects and purchaser pays the 1000

Question 14

what is a request further information?

Answer 14

a request for further information or a counter offer? Difficult to distinguish

Question 15

what is Consideration?

Answer 15

In the law of contract, a proimse or benefit must be paid for - thus the consideration is the price paid for a promise or a benefit - it is a promise to do something but is not the performance of that promise

Question 16

What is a Deed?

Answer 16

A deed is a formal legal document, signed and witnessed in a particular way

Question 17

Why were deeds created?

Answer 17

A way to avoid the need for consideration, yet still create an enforceable obligation is by the creation of a deed

Question 18

Why do people use deeds?

Answer 18

deeds are often used to ensure that a promise or obligation is met without the need to prove the requirements of a contract eg a mortgage

Question 19

Does a contract have to be in a particular form?

Answer 19

generally speaking, no, provided the agreement, intention and consideration exist, then a legally binding contract has been made

Question 20

What is the exception to the rule of whether contracts have to be in particular forms?

Answer 20

The Property Law Act 2007 - this act provides that certain types of contract must be documented in writing in order to be enforceable

Question 21

What does the contracts act apply to ?

Answer 21

any contract for the sale or other disposition of land which must be in writing or have its terms recorded in writing - must be signed by the party against who, the contract sought to be enforced

Question 22

definition of guarantees?

Answer 22

Contracts under which a person agrees to answer to another person for the debt, default or liability of a third person

Question 23

The terms of a contract

Answer 23

The obligations (what the parties have to do) in a contract are part of the terms of a contract - falling in to two categories; express terms and implied terms

Question 24

Express and implied terms

Answer 24

express terms- might be described as aspects of control that the parties have turned their minds to (Or thought about ) such terms thus expressly agreed upon and incorporated into the contract even tho they are not recorded in writing
implied terms- terms that have not been expressly agreed upon by the parties but which are by law incorporated into the contract

Question 25

What are damages?

Answer 25

damages are compensation for different types of loss

Question 26

compensation for different kinds of loss

Answer 26

expectation loss - to put the innocent party in the same financial position as if the contract had been performed correctly

reliance loss - compensation for expenditure incured in reliance on the contract

Question 27

principles of awards of damages

Answer 27

defendant is liable for normal loss and loss which should have been in the deffs contemplation due to defs knowledge of special circumstances

jarvis v swan tours

Question 28

agreed damage

Answer 28

damages may be pre-agreed between the parties (before agreeing to accept contract)

Question 29

Termination of the contract

Answer 29

if the breach is minor, you have to claim damages and carry on

if its serious, you can terminate the contract

it is governed by the contracts and commercial law act

Question 30

When may the contract be terminated?

Answer 30

In circumstances of repudiation (the party in breach makes it clear they will not perform the contract at all)

Question 31

Past consideration?

Answer 31

this is where, a promise was made after doing something - there was no reliance on the promise when proceeding in a task