Contract Law Unit 1

Question 1

Define Law

Answer 1

Refers to the body of principles and rules of behaviour passed by the Government to avoid conflict and settle disputes in an orderly way

Question 2

Name Irish law makers

Answer 2

Dail, Seanad, EU legislation, Judiciary

Question 3

Define a contract and how it may be agreed

Answer 3

A contract is a legally binding agreement which is enforced by law
This means the law recognises that the people who made the contract have both rights and duties as a result of the agreement

An agreement may be made in the following ways:
Orally
In writing
Implied by conduct

Question 4

Name the elements of a contract

Answer 4

1. Offer
2. Acceptance
3. Consideration
4. Capacity to contract
5. Consent to contract
6. Intention to contract
7. Legality of form
8. Legality of purpose

Question 5

Describe an offer

Answer 5

An offer is a promise by the person making the offer to be bound by the contract if the offer is accepted properly
An offer must be:
Clear
Unconditional
Made known
Expressed or implied
May be cancelled any time before it’s accepted

Question 6

Name and explain the methods of terminating an offer

Answer 6

1. Revocation: The person making the offer changes his mind and withdraws the offer before its accepted
2. Rejection: The person receiving the offer rejects it
3. Pressure/Duress: If the offer is accepted through duress (physical/mental), the contract is not valid
4. Lapse of time: The passage of time may cause the offer to lapse and so not be accepted
5. Counter Offer: If any changes to the contract are sought before an agreement is reached, then it’s regarded as a counter offer and the original offer is dead

Question 7

Outline Invitation to Treat

Answer 7

This is not an offer it is an invitation for a person to make an offer
It is simply the beginning of the process which may or may not end in an agreement

Question 8

Define Acceptance

Answer 8

To accept means to unconditionally agree to the terms of the offer made
An acceptance of an offer must have no conditions attached to it

Can be oral, written or implied
Must be clear
Must be unqualified and exactly match the offer

Question 9

Define Consideration

Answer 9

The acceptance of an offer must be accompanied by some benefit moving from one person to another in a contract e.g Cash
Consideration must be real and valuable

Question 10

Define Intention to contract

Answer 10

Both parties to the contract must be aware that they are entering a legally binding agreement that could see them in court if they fail to keep their side of the bargain

Question 11

Define Consent to contract

Answer 11

Both parties must enter the contract of their own free will, there must be no undue pressure
Consent must be honest and voluntary

Question 12

Define Capacity to contract

Answer 12

All human and corporate beings can enter into a contract:
No capacity if:
Legal Infants: persons under 18 years of age except for necessities

People of unsound mind or under the influence of drugs or alcohol as they’re believed to not have the ability to understand

Ultra Vires: Companies cant act outside their constitution, if it does there is no legal contract

Diplomats: These can claim diplomatic immunity and therefore have no legal capacity as they’re acting for their country and not themselves

Question 13

Define Legality of Form

Answer 13

If the contract is required by law to be laid out in a specific manner then, it must be in that manner or it will be invalid e.g all of the contracts for sale of property must be in writing

Question 14

Define Legality of Purpose

Answer 14

To be a legally binding contract one must have a legal purpose, if an illegal contract exists, then no action can be taken for the breach of it

Question 15

Describe the 4 ways a a contract can be named if one of the last 5 elements are not adhered to

Answer 15

Void: The contract never existed in law but existed in fact

Voidable: It may be set aside

Illegal: No action can be taken on the contract

Unenforceable: The contract is good but it cannot be enforced e.g one party had no legal capacity

Question 16

Define Privity of Contract

Answer 16

This means the rights and duties following any contract only belong to the actual parties involved in the contract
Third parties have no legal rights

Question 17

Explain the types of terms involved in a contract

Answer 17

Expressed Terms: Terms which are clearly stated e.g To build a house according to the plans

Implied Terms: Not expressly stated but implied by the provisions of a particular law, e.g Provisions of Sale of Goods and Supply of Services act 1980, wood and bricks must be of merchantable quality

Question 18

Define a condition

Answer 18

This is a part of a contract which is fundamental to the contract, if a condition is broken the contract may be cancelled and damages sought by the injured parties

Question 19

Define a Warranty

Answer 19

This is a part of the contract which is not fundamental to the contract
If a warranty is broken the injured party may seek damages but may not end the contract

Question 20

Name and explain the methods of terminating a contract

Answer 20

1. Performance: Both parties to the contract carried out their side of the contract as agreed
2. Agreement: Both parties to the contract have an agreement that they would be better off ending the contract e.g manager of a football team
3. Breach of Contract: One party to the contract breaches a condition of the contract, this in turn gives the other party the right to end the contract
4. Frustration: Events which make it impossible to carry out the contract e.g a concert is cancelled as the lead singer of the band dies

Question 21

Name and explain remedies for breach of contract

Answer 21

Cancelled: Contract may be cancelled or rescinded and the innocent party can have the contract set aside and retuned to the situation they were in before the contract had begun e.g annulment

Damages: Financial compensation usually the main remedy

Specific Performance: The court orders that the terms of the contract be carried out as originally agreed, this is used when money isn’t an adequate remedy