Contract Law (Core Principles) Flashcards
Basic requirements for formation of a contract
(1) OFFER
(2) ACCEPTANCE
(3) consideration
(4) INTENTION TO CREATE LEGAL RELATIONS:
(5) capacity
(6) terms must be definite & certain
Parties to a contract
privity of contract
rights of third parties
Contract Terms
express terms
incorporation of terms
terms implied by common law and statute
exemption clauses
the interpretation of contract terms (conditions, warranties and innominate terms)
variation.
Vitiating factors
misrepresentation
mistake
unfair contract terms
duress and undue influence
illegality.
Termination
expiry or other specified event
breach
frustration
basic principles of restitution and unjust enrichment in the context of termination of contract
Remedies
damages
liquidated sums and penalties
specific performance
injunctions
duty to mitigate
indemnities
guarantees.
Causation & Remoteness
Main features of an Offer
offeree must have knowledge of the offer, offeror has intention to be legally bound, can be a unilateral contract, cannot be a request for information or an invitation to treat. Can be revoked at any time pre-acceptance via reliable source, effective upon receipt, but not if a collateral contract was made to keep offer open or performance has began)
Main features of Acceptance
alternative to rejection/counteroffer. Counteroffer is negotiation but not an enquiry/request for information. Implied rejection after a reasonable time has passed, it is/becomes illegal, or a condition isn’t met. Unless stipulated in the offer, acceptance can happen in any reasonable manner & medium. If stipulated, another form of acceptance can be used as long as no less advantageous. Usually silence cannot = acceptance.
A unilateral contract is not accepted until the performance is complete (even though beginning the performance = irrevocable).
Postal rule: acceptance at the time of posting (as long as accurately addressed & offer doesn’t say ‘no postal acceptance’.
Battle of the form - last non-objected shot wins the battle.
Main features of Intention to create legal relations
- Rebuttable presumption of non-intention in family members & close friends
- Rebuttable presumption of intention (the opposite) in commercial settings.
- If they are close friends/family in business, the commercial setting usually wins.
Capacity to contract
Minor (under 18). The minor can void the contract but the other party can’t, unless its for necessary goods/services or employment.
The court can require the minor to transfer property back.
Lacking capacity: If it was an unreasonable price, it is voidable by the person lacking capacity if the other party knew. If the price was reasonable for necessities or the other party didn’t know, then it is binding.
Main features of consideration
(1) Can be act or omission to act
(2) Doesn’t matter about value (e.g. peppercorn)
(3) p64
