Contract Law Essentials [11] Flashcards
Contract Law Essentials
What are the three requisite elements for the creation of a legal contract? [1]
The three elements required to create a legal contract are offer, acceptance and consideration.
Contract Law Essentials
What does ‘consideration’ mean? [1]
Consideration means something which is of some value in the eyes of the law – it is the price for which the promise of the other is bought. … “An act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable.”
Contract Law Essentials
What is the key rule regarding contractual acceptance? [1]
Acceptance of an offer must be communicated to the offeree for it to be binding, and the terms of acceptance must exactly match the terms of the offer.
Contract Law Essentials
Can silence ever amount to valid acceptance of an offer by an offeree? [3]
The silence of an offeree will not amount to acceptance: (Felthouse v Bindley [1862] EWHC CP J35)
However, acceptance may be made via conduct (Brogden v Metropolitan Railway Co. (1877) 2 App. Cas. 666) but only where that conduct evidences, on an objective analysis, a clear and unequivocal intention to accept the terms of the offer (see Reveille Independent LLC v Anotech International (UK) Ltd [2016] EWCA Civ 443)
Contract Law Essentials
What limitation period applies to a breach of contract and when does that period begin to run? [2]
Under s.5 Limitation Act 1980, a six-year limitation period for a claim for breach of contract begins to run when the breach of contract occurs regardless of whether any damage is suffered at that point and regardless of whether the innocent party knows there has been a breach of contract.
N.B. Limitation periods do not begin to run in respect of claims for fraud or mistake or where a relevant fact has been deliberately concealed until those matters have been discovered (or ought reasonably to have been discovered) by the innocent party. Deliberate concealment involves the concealment of deliberate wrongdoing or taking active steps to conceal a breach of duty.
Contract Law Essentials
What limitation period applies to a breach of contract made by Deed, and when does that period begin to run? [1]
Under s.8 Limitation Act 1980, a twelve-year limitation period applies to deeds. As with breach of contract claims, the time-limit runs from the date the breach occurs.
Contract Law Essentials
Broadly, what contractual damages can be obtained by a successful claimant? [1]
Broadly, recoverable losses must have been caused by the breach and must have been reasonably foreseeable at the time of contracting (i.e. not too remote). The court’s take an objective approach to determining these elements.
N.B. A well worded contractual indemnity (for example) will give a party better and wider protection than a normal damages claim would provide (as the latter would be restricted by reasonable foreseeability and any mitigation of loss)
Contract Law Essentials
What is a unilateral contract? [1]
A unilateral contract is a contract agreement where an offeror promises something of value on the occurrence of a specified act. If the act is performed by an offeree, the contract becomes enforceable. In general, unilateral contracts are most often used when an offeror has an open request in which they are willing to provide a benefit for a specified act.
It is called a ‘unilateral’ contract as only one party is making an express promise.
