Contract Law Flashcards
Define contract
Legally enforceable agreement between two parties
Offer
The proposition put forward by one person to another coupled with an intention that they are willing to be bound by the offer
What must an offer be before it is accepted (understanding)
Everybody must be clear and the offer must be unambiguous
What is getting a quote?
Invitation to treat
When and by whom is an offer made to buy insurance?
When the potential insured sends a proposal form to the insurance company with money.
What is the cases that set precedent on invitation to treat
Ministry for commerce v. Pim [1966]
What are advertisements
Unilateral agreements
What is needed for an offer to be valid?
Intention
Acceptance
The offer must be accepted in full for the acceptance to count
What is acceptance with a but?
Counteroffer
Explain the hyde vs wrench president
Making a counteroffer makes the previous offer void.
Can acceptance be infered?
Yes through conduct
Can an offer be accepted by silence?
No
How can you waive your right to acceptance?
Written form
When posting a contract, when is acceptance formed?
When it is posted Kelly v Cruise Catering [1994]
When emailing a contract, when is acceptance formed?
When the person has had a reasonable opportunity to view the contract (9am-5pm)
How does an offer get terminated? (4)
Revoked, Lapse of time, death of other party, failure of conditions (didn’t deliver goods)
How long of a gracing period do insurers usually give?
30 days
Agreement =
Offer + acceptance
What does it mean to be ad idem to the contract?
Of the same mind
Consideration
There must be an exchange of something real and valuable to show willingness to the contract
What is consideration in an insurance contract
The promise to indemnify you for money
Intention to create legal relations (ICLR)
Must be the intention of both parties to create a legal relationship, not a social one
In terms of ICLR, the closer the relationship …
The less likely there is ICLR
In commercial contracts is there ICLR
Yes it is assumed
Who has to prove incapacity?
The person claiming capacity must show that the other person knew that they were incapacitated and that the goods were not for a necessary purpose
What case sets precedent for capacity?
Nash v. Inman [1908]
Who does not have the capacity to a contract (4)
- Person of unsound mind (incarcerated)
- Intoxicated person
- Coporations acting ultra vires
- Person under 18
Induced into a contract
When somebody is misled into a contract
What overrides the other, an expressed or implied?
An expressed term overrides any implied term unless it takes away a legal or constitutional right
Implied term
Not said in the contract but assumed to be part of the contract
Example of an implied term
A carpenter is to do a good job of making a table
What is the purpose of an implied term?
To prevent accidental omission
What is an expressed term
thoes witch have been subject of discussion and acceptance between both parties.
Can courts imply terms?
Only if absolutely necessary
What does the court look at when enforcing a contract
The intention of the contract
What is the common law basis for implied terms? (name of test and case it comes from)
The officious bystander / reasonable man test from the Moorcock case 1889
Can terms implied by statute be overwritten by an expressed term?
No
What are some implied terms that exist in an insurance contract?
- The object must exist
- Insurer is not liable for losses caused by willful misconduct
What party do expressed terms come from
Offrer
What are expressed terms used to do?
Clarify ambiguity
How can expressed terms be communicated?
Writing or speech but speech are very hard to prove
Whats an exclusion clause
An expressed term that states something is not included
Contr proferentuim
Against the one bringing it forward - if the insurer leaves ambiguity in the contract then the court rules against the insurer
What is a warranty?
A legal promise to behave in a certain way
Suspensive condition
A contract is paused when a condition is broken
What are the 3 types of conditions
- Condition
- Condition precedent to validity
- Conditions precedent to liability
Condition precedent to validity
Breach prevents the policy from coming into existence, ie if the condition is broken then the policy is over
Conditions precedent to liability
The contract is void from the start
Example of precedent to liability
Failure to disclose material facts
What happens if a false statement induces another party into a contract?
Then it is void from inception
What does it mean for a policy to be against public policy?
It is illlegal
How can a contract be terminated
Peformance or breach
Void
Contract is over and cancelled
Voidable
Can be cancelled but the insurer give them time to fix it
What are the remedies for breach (3)
- Cancel the policy
- sue for Damages
- Injunction
Prohibitory injunction
Prevent something from happening
Mandatory injunction
Force them to fulfil the contract
